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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 March 31, 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">(Name of Small Business Issuer in Its Charter)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 70.5pt 0 0; text-align: center"><FONT STYLE="letter-spacing: -0.2pt">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 70.5pt 0 0; text-align: center"><FONT STYLE="letter-spacing: -0.2pt">&nbsp;</FONT></P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
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      <td style="width: 47%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">Delaware</font></td>
      <td style="width: 20%; padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="width: 33%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">87-0561426</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">(State
          or Other Jurisdiction</font></P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">of Incorporation
          or Organization)</font></P></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">(IRS
          Employer</font></P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">Identification
          No.)</font></P></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">510 Shotgun Road, Suite 110</font></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">Fort Lauderdale, Florida</font></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="border-bottom: Black 1pt solid; padding-right: -0.9pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">33326</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">(Address of Principal Executive Offices)</font></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">(Zip Code)</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10.5pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="width: 79%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif"><u>(954) 423-5345</u></font></td>
      <td style="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif">(Issuer&rsquo;s Telephone Number)</font></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif">(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 1 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo; Options: Hidden -->&nbsp;<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
  been subject to such filing requirements for the past 90 days. Yes [X] No [ ]</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
  to be submitted and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the preceding 12 months
  (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No []</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company.
  See definition of &ldquo;large accelerated filer,&rdquo;&ldquo;accelerated filer,&rdquo; and &ldquo;smaller reporting company in
  Rule 12b-2 of the Exchange Act. (Check one):</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td style="width: 39%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Large Accelerated Filer [&nbsp;&nbsp;]</font></td>
      <td style="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="width: 43%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Accelerated Filer [&nbsp;&nbsp;]</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Non-Accelerated Filer [&nbsp;&nbsp;]</font></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Smaller reporting company [X]</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPLICABLE ONLY TO ISSUERS INVOLVED IN
  BANKRUPTCY</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROCEEDINGS DURING THE PRECEDING FIVE YEARS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Check whether the registrant
  has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution
  of securities under a plan confirmed by a court. Yes [ ] No [ ]</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPLICABLE ONLY TO CORPORATE ISSUERS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">State the number of shares
  outstanding of each of the issuer&rsquo;s classes of common equity, as of the latest practicable date. As of June 2, 2015, the
  Company had outstanding 1,166,978 shares of common stock, par value $0.0001 per share.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 2 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 9pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>PART
  I</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>&nbsp;</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>FINANCIAL
  INFORMATION</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt">The
  Condensed </FONT>Consolidated<FONT STYLE="letter-spacing: -0.15pt"> Financial Statements of the Company are prepared as of
  March 31, 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 March 31, 2015 (unaudited) and December 31,2014</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: 10.5pt Times New Roman, Times, Serif">4</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_002">Condensed Consolidated Statements of Operations for the three month periods ended March 31, 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: 10.5pt Times New Roman, Times, Serif">5</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_003">Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 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: 10.5pt Times New Roman, Times, Serif">6</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_004">Notes to the Unaudited Condensed Consolidated Financial Statements</A>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">7</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
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  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><A NAME="a_001"></A>Condensed Consolidated Balance Sheets</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><U>ASSETS</U></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">March 31,</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">(Unaudited)</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">CURRENT ASSETS</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Cash and cash equivalents</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">152</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">811</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">Accounts receivable, net of allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Current Assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,152</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">28,811</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 20pt">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">28,152</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</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: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD COLSPAN="9" STYLE="text-decoration: underline; text-align: center">LIABILITIES AND STOCKHOLDERS' DEFICIT</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">CURRENT LIABILITIES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">962,169</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">959,469</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Due to related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,973</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: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accrued expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,373,543</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: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Convertible debenture/notes payable - short term (net of</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">&nbsp;&nbsp;discount of $6,026 and $6,358, respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">640,470</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: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Convertible notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">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: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,034,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,034,610</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,138,106</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: 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">377,362</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">6,913,955</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">6,913,955</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, 1,166,978 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">117</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">52,623,744</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">(59,509,664</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">(6,885,803</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">28,152</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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  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><A NAME="a_002"></A>Condensed Consolidated Statements of Operations</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" 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></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></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">March 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: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">NET SALES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">47,414</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-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">&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">36,338</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">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">&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">11,076</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">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></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: 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">118,310</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">450,133</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 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">118,310</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">450,133</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">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">(118,310</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">(439,057</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">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></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">Gain on change in fair value of derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,097</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">238,380</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">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></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">&nbsp;&nbsp;of $36,330 and $380,021, 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">(179,383</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">(728,975</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Other Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(172,286</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">(490,595</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">LOSS BEFORE INCOME TAXES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(290,596</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(929,652</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">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></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">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">(290,596</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(929,652</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">BASIC AND DILUTED:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="padding-bottom: 2.5pt; padding-left: 10pt">Net loss per common share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.25</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">(41.04</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">1,166,978</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22,655</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></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="13" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><A NAME="a_003"></A>Condensed Consolidated Statements of Cash Flows</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center">(Unaudited)</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center">For the Three 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">March 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">CASH FLOWS FROM OPERATING ACTIVITIES:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(290,596</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(929,652</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Adjustments to reconcile net loss to net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;cash used in operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">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">163,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Stock based compensation</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,028</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,028</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">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">500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71,259</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">Non-cash interest expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,519</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">221,664</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">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,097</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(238,380</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">Amortization of debt discounts</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,330</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">380,021</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">206,157</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">191,610</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Due to related parties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; 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">(6,159</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">(105,950</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">CASH FLOWS FROM INVESTING ACTIVITIES:</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Net proceeds from notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">279,950</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">(174,000</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">5,500</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">105,950</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 (DECREASE) IN CASH AND CASH EQUIVALENTS</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(659</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</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>&nbsp;</TD><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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">152</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">SUPPLEMENTAL CASH FLOW INFORMATION</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Cash Payments For:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 20pt">Interest</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">76</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,725</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">$</TD><TD STYLE="text-align: right">11,520</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">553,664</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">$</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">54,816</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">142,746</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 convertible note payable - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">45,000</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">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: White">
      <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD COLSPAN="9" STYLE="text-align: center">The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: justify; color: Red"><B></B></P>
  
  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: justify; color: Red"></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">March 31, 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: justify"></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 three months ended March 31, 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"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Organization and Nature of Operation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fuelstream, Inc. (the
  &ldquo;Company&rdquo;) was incorporated under the laws of the State of Delaware on July 12, 1996 under the name of
  &ldquo;Durwood, Inc.&rdquo; From April 6, 1999 to April 9, 2010, the Company operated as a sports marketing firm under
  the name of &ldquo;Sportsnuts, Inc.&rdquo; On April 9, 2010, the Company changed its name to Fuelstream, Inc. and changed
  its business model to become a fuel transportation and logistics company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 11, 2011, the Company entered
  into a joint venture agreement (&ldquo;Joint Venture&rdquo;) with Aviation Fuel International, Inc., a Florida corporation
  (&ldquo;AFI&rdquo;) and a purchaser and reseller of aviation fuel for commercial and private aircraft. The Joint Venture
  required the Company to contribute up to $200,000 in respect of supplying aviation fuel to various commercial aircraft via
  tanker trucks which were intended to be acquired by the Joint Venture. The Company ultimately contributed $183,500 in
  connection with the Joint Venture. On January 18, 2012, the Joint Venture was terminated upon completion of the acquisition
  of AFI, which is now a wholly-owned subsidiary of the Company (refer to note 3).</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 10, 2012, the Company along
  with two partners formed AFI South Africa LLC (&ldquo;AFI SA&rdquo;), immediately the Company purchased shares of the other
  partners to become 100% owner of AFI SA (refer to note 3). AFI SA was effective as Limited Liability Company under the Act by
  the filing organization with the office of the Secretary of State of Florida on May 11, 2012. The Company has been organized
  for the purpose of partnering with Global Aviation for brokering the sale of Fuel for aircraft in South Africa.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Use of Estimates</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 5pt; text-align: justify">The preparation of unaudited condensed
  consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires
  management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
  assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
  period. Actual results could differ from those estimates.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Revenue Recognition</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in
  accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (&ldquo;ASC 605-10&rdquo;)
  which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an
  arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is
  reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature
  of the selling prices of the products delivered and the collectability of those amounts.</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">ASC605-10 incorporates Accounting
  Standards Codification subtopic 605-25, Multiple-Element Arrangements(&ldquo;ASC 605-25&rdquo;). ASC 605-25 addresses
  accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use
  assets.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Principles of Consolidation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements have
  been prepared in accordance with accounting principles generally accepted in the United States (&ldquo;US GAAP&rdquo;) and include
  the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Cash</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers cash to consist
  of cash on hand and temporary investments having an original maturity of 90 days or less that are readily convertible into
  cash.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Income Taxes</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted Accounting Standards
  Codification subtopic 740-10, Income Taxes (&ldquo;ASC 740-10&rdquo;) which requires the recognition of deferred tax liabilities
  and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
  tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
  Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily
  of timing differences such as deferred officers&rsquo; compensation and stock based compensation accounting.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Net Loss per share</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company complies with accounting and
  disclosure requirements of FASB ASC 260, &ldquo;Earnings Per Share.&rdquo; Net loss per ordinary share is computed by dividing
  net loss applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Common
  share equivalents are excluded from the diluted earnings (loss) per share computation if their effect is anti-dilutive.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Stock based compensation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows Accounting
  Standards Codification subtopic 718-10, Compensation (&ldquo;ASC 718-10&rdquo;) which requires that all share-based payments
  to both employees and non-employees be recognized in the income statement based on their fair values.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock based compensation recorded in
  the unaudited condensed consolidated financial statements for the three months ended March 31, 2015 and 2014 were $34,028 and
  $34,028, respectively.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Financial Instruments</I></P>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2008, the Company adopted FASB
  ASC 820-10-50, &ldquo;Fair Value Measurements.&rdquo; This guidance defines fair value, establishes a three-level valuation hierarchy
  for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined
  as follows:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: TimesNewRomanPSMT-Identity-H">- </FONT>Level
  1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities inactive
  markets<FONT STYLE="font-family: TimesNewRomanPSMT-Identity-H">.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">- Level 2 inputs to the
  valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are
  observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
  instrument.</P>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">- Level 3 inputs to valuation methodology
  are unobservable and significant to the fair measurement.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in
  the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial
  instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such
  instruments and their expected realization and their current market rate of interest.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I><U>Derivative Liabilities</U></I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company assessed the classification of
  its derivative financial instruments as of March 31, 2015, which consist of convertible instruments and rights to shares of the
  Company&rsquo;s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 815 generally provides three criteria
  that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing
  derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks
  of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host
  contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured
  at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings
  as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
  instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is
  deemed to be conventional, as described.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I><U>Convertible Instruments</U></I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates and accounts for conversion
  options embedded in its convertible instruments in accordance with professional standards for &ldquo;Accounting for Derivative
  Instruments and Hedging Activities&rdquo;.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Professional standards generally provide
  three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them
  as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics
  and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of
  the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
  re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported
  in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered
  a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be
  conventional as defined under professional standards as &ldquo;The Meaning of &ldquo;Conventional Convertible Debt Instrument&rdquo;.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for convertible instruments
  (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance
  with professional standards when &ldquo;Accounting for Convertible Securities with Beneficial Conversion Features,&rdquo; as those
  professional standards pertain to &ldquo;Certain Convertible Instruments.&rdquo; Accordingly, the Company records, when necessary,
  discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences
  between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion
  price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest
  date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded
  in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of
  the note transaction and the effective conversion price embedded in the note.</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">ASC 815-40 provides that, among other things,
  generally, if an event is not within the entity&rsquo;s control could or require net cash settlement, then the contract shall be
  classified as an asset or a liability.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Recently adopted accounting pronouncements</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2015, the Financial Accounting Standards
  Board (&quot;FASB&quot;) issued Accounting Standards Update (&ldquo;ASU&rdquo;) No. 2015-03, Interest - Imputation of Interest
  (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs
  related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that
  debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected
  by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years, and interim periods
  within those fiscal years, beginning after December 15, 2015. The amendments are to be applied on a retrospective basis, wherein
  the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance.
  We do not expect the adoption of ASU 2015-03 to have a material effect on our financial position, results of operations or cash
  flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2015, the FASB issued ASU No.
  2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which is intended to improve targeted areas of consolidation
  guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized
  debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU focuses on the consolidation
  evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In
  addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards
  Codification and improves current U.S. GAAP by placing more emphasis on risk of loss when determining a controlling financial interest,
  reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable
  interest entity (&ldquo;VIE&rdquo;), and changing consolidation conclusions for companies in several industries that typically
  make use of limited partnerships or VIEs. The ASU will be effective for fiscal years, and interim periods within those fiscal years,
  beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. We do not expect the adoption
  of ASU 2015-02 to have a material effect on our financial position, results of operations or cash flows.<FONT STYLE="font-family: Times New Roman, Times, Serif">&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">In January 2015, the FASB issued ASU No.
  2015-01, &ldquo;Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation
  by Eliminating the Concept of Extraordinary Items.&rdquo; This ASU eliminates from U.S. GAAP the concept of extraordinary items.
  ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A
  reporting entity may apply the amendments prospectively. We do not expect the adoption of ASU 2015-01 to have a material effect
  on our financial position, results of operations or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2014, the FASB issued ASU No.
  2014-17, &ldquo;Business Combinations (Topic 805): Pushdown Accounting.&rdquo; This ASU provides an acquired entity with an option
  to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control
  of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the
  change-in-control event occurs. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable.
  ASU 2014-17 was effective on November 18, 2014. The adoption of ASU 2014-17 did not have any effect on our financial position,
  results of operations or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2014, the FASB issued ASU 2014-16,
  &ldquo;Derivatives and Hedging (Topic 815).&rdquo; ASU 2014-16 addresses whether the host contract in a hybrid financial instrument
  issued in the form of a share should be accounted for as debt or equity. ASU 2014-16 is effective for fiscal years, and interim
  periods within those fiscal years, beginning after December 15, 2015. We do not currently have issued, nor are we investors in,
  hybrid financial instruments. Accordingly, we do not expect the adoption of ASU 2014-16 to have any effect on our financial position,
  results of operations or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 10 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">In August 2014, the FASB issued ASU No. 2014-15,
  &quot;Presentation of Financial Statements - Going Concern (Subtopic 205-40)&quot;. ASU 2014-15 provides guidance related to management's
  responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide
  related footnote disclosure. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and for interim and annual
  periods thereafter. Early application is permitted. We do not expect the adoption of ASU 2014-15 to have a material effect on our
  financial position, results of operations or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In June 2014, the FASB issued ASU No. 2014-12,
  &ldquo;Compensation &ndash; Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide
  That a Performance Target Could Be Achieved after the Requisite Service Period.&rdquo; This ASU requires that a performance target
  that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12
  is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We do not expect
  the adoption of ASU 2014-12 to have a material effect on our financial position, results of operations or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU No. 2014-09,
  &ldquo;Revenue from Contracts with Customers (Topic 606).&rdquo; ASU 2014-09 affects any entity using U.S. GAAP that either enters
  into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless
  those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 is effective
  for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We do not expect the adoption
  of ASU No. 2014-09 to have a material effect on our financial position, results of operations or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2014, the FASB issued ASU No. 2014-08,
  &quot;Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) and Reporting Discontinued
  Operations and Disclosures of Disposals of Components of an Entity.&quot; ASU 2014-08 amends the definition for what types of asset
  disposals are to be considered discontinued operations, as well as amending the required disclosures for discontinued operations
  and assets held for sale. ASU 2014-08 is effective for fiscal years, and interim periods within those fiscal years, beginning on
  or after December 15, 2014. The adoption of ASU 2014-08 did not have any effect on our financial position, results of operations
  or cash flows.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Recent accounting pronouncements issued by
  the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future unaudited
  condensed consolidated financial statements.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Reclassification</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain reclassifications have been made
  to prior periods' data to conform to the current period's presentation. These reclassifications had no effect on reported income
  or losses</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">NOTE 2 -GOING
  CONCERN CONSIDERATIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed
  consolidated financial statements have been prepared using generally accepted accounting principles applicable to a going
  concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As
  reported in its Annual Report on Form 10-K for the year ended December 31, 2014, the Company has an accumulated deficit of
  $59,219,068 from inception of the Company through December 31, 2014. It should be noted that prior to the acquisition of AFI
  as discussed in Note 3, the Company had an accumulated deficit of $32,105,264 as reported in its Annual Report on Form 10-K
  for the year ended December 31, 2011. The accumulated deficit as of March 31, 2015 was $59,509,664 and the total
  stockholders&rsquo; deficit at March 31, 2015 was $6,885,803 and had working capital deficit (current liabilities minus
  current assets) of $6,885,803, 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>
  
  
  <!-- Field: Page; Sequence: 11 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The Company&rsquo;s management continues
  to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient
  funds, therefore, as to be able to operate over the next twelve months. The Company is attempting to improve these conditions by
  way of financial assistance through issuances of additional equity and by generating revenues by brokering the sale of aircraft
  fuel. No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to
  management.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; 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/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 3 -ACQUISITION</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 18, 2012 the Company
  completed the acquisition of 100% of the equity of Aviation Fuel International, Inc., a Florida corporation
  (&ldquo;AFI&rdquo;). AFI is a purchaser and reseller of aviation fuel for commercial and private aircraft. The consideration
  for the acquisition of AFI consisted of 7,400,000 shares of restricted common stock, loan receivable adjusted for $183,500
  and a note payable in the amount of $1,000,000. As part of the acquisition, the Company recorded goodwill in the amount of
  $6,000,410 on June 25, 2013. The Company disaffirmed the note payable of $1,000,000. However, until the Company receives a
  judicially approved release, the note payable will remain on the financial statements and is included in the balance sheet as
  of March 31, 2015. Prior to the acquisition, AFI had accumulated notes payable of $1,356,300 and accounts payable of
  $536,610. These liabilities have been recorded in the condensed consolidated balance sheet. These liabilities are due from
  AFI and were not incurred or guaranteed by the parent company, Fuelstream, Inc.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 4 -LOSS CONTINGENCIES</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is involved with various legal
  proceedings as described in Part II Item I of this Form 10-Q. The Company has evaluated these contingencies per the requirements
  of ASC 450-20 (previously SFAS 5, &ldquo;Accounting for Contingencies&rdquo;) and determined that the likelihood of loss from these
  proceedings are remote.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">NOTE 5 -
  ACCOUNTS RECEIVABLE</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable at March 31, 2015
  and December 31, 2014 are as follow:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">March 31, <BR>2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: justify; padding-bottom: 1pt">Accounts receivable</TD><TD STYLE="width: 8%; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">698,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">698,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">698,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">698,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt">Less: allowance on accounts receivable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(670,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(670,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Accounts receivable, net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">28,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is involved in disputes with
  $698,000 of the above accounts receivable and has filed a lawsuit.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 12 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">NOTE 6 -ACCOUNTS PAYABLE AND ACCRUED EXPENSES</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accounts payable of $962,169, as of
  March 31, 2015, includes two parties who are seeking motion for entry for final garnishment judgment. The Company has assumed
  these two accounts payable with the acquisition of AFI (refer to note 3). Per court order interest is calculated at rate of
  6% per annum on $325,138 on one of the accounts payable and 18% on $192,061 (principal amount) of the second accounts
  payable. Accrued interest on accounts payable balance as of March 31, 2015 and December 31, 2014 is $196,628 and $183,108,
  respectively. Interest expense of $13,520 was charged to expenses during the three months ended March 31, 2015.</P>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 7 - NOTES PAYABLE</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">Notes payable consisted of the following:</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">March 31, <BR>2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify; padding-left: 5.4pt">Notes payable, issued on May 6, 2011, unsecured, interest at 10% per annum, due on demand.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">59,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">59,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable, issued on August 25, 2010, unsecured, interest at 10% per annum due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on October 18, 2010 to individual, unsecured, interest at 15% per annum, due on demand(1)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on October 4, 2013, January 16, 2014, and January 22, 2014 to a company, unsecured, interest at 8% per annum, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on March 5, 2013 to individual, unsecured, interest at 8% per annum, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Notes payable issued on July 1, 2013 to company, unsecured, interest at 8% per annum, due on demand</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">810</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">810</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 24.45pt">Total notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,034,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,034,610</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 15.45pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,034,610</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,034,610</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 24.45pt">Long-term notes payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Maturities of notes payable are as follows:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt"><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Year Ending March 31,</u></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Amount</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">2016</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,034,610</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;<BR>Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,034,610</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on notes payable as of March
  31, 2015 was $541,688 and as of December 31, 2014 was $505,482. Interest expense of $36,440 has been charged to expenses for the
  three months ended March 31, 2015.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10.5pt">This
                                           Note payable was assumed on the acquisition of AFI. The Company is negotiating a settlement
                                           <FONT STYLE="background-color: White">agreement for $786,300, inclusive of all interest
                                           on the date of settlement.</FONT></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  
  <!-- Field: Page; Sequence: 13 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"></P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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 0 0 0.75in; text-align: justify; text-indent: -0.75in">NOTE 8 -
  CONVERTIBLE DEBENTURE/NOTES PAYABLE</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">March 31, <BR>2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on February 20, 2014, unsecured, zero interest if paid on or before 90 days otherwise one time interest charge of 12%, due on February 20, 2016. Unamortized debt discount of $1,848 and $2,352, respectively.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">2,272</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">1,768</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on October 2013, unsecured, interest at 6%, due on October 13, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,912</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,912</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued in January 2014, unsecured, interest
      at 8%, due on January 30, 2015. Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on January 2, 2014, unsecured, interest at 10%, due on June 2, 2014 (in default), convertible into common stock at 60% of the bid price on the date of conversion. Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,209</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,209</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on March 10, 2014, unsecured, interest at 10%, due on April 10, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,669</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,669</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on April 9, 2014, unsecured, interest at 10%, due on May 4, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,679</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,679</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on March 31, 2014, unsecured, interest at 8%, due on January 2, 2015. Unamortized debt discount of $-0- and $580, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,310</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72,730</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on September 1, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">93,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">93,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on June 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt"></TD></TR></TABLE>
  
  
  
  
  <P STYLE="margin-top: 0; margin-bottom: 0"></P>
  
  <!-- Field: Page; Sequence: 14 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 2015</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&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; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt; width: 70%"><BR>Convertible note issued on May 16, 2014, unsecured, interest at 8%, due on November 16, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">1,975</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">1,975</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on June 30, 2014, unsecured, interest at 8%, due on December 30, 2014. Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,929</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on July 9, 2014, unsecured, interest at 10%, due on February 9, 2015. Unamortized debt discount of $-0- and $827, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,556</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,730</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on August 29, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,890</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,890</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $978, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89,022</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $978, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89,022</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $155, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,250</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,095</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $489, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,511</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on January 6, 2015, unsecured, interest at 8%, due on October 10, 2015. Unamortized debt discount of $4,181 and $-0-, respectively.</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,819</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 24.45pt">Total notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">640,470</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: justify; padding-bottom: 1pt; padding-left: 24.45pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(640,470</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">(634,141</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 24.45pt">Long-term convertible debenture/notes payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture February 20, 2014
  </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 20, 2014, the Company issued
  a $25,000 Convertible Promissory Note which bears interest at a rate of 12%, due on February 20, 2016 and is convertible into the
  Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 60% of the lowest three day trading price
  for ten trading days immediately preceding the date of conversion. Any amount of principal or interest on this Note which is not
  paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is
  paid (&ldquo;Default Interest&rdquo;) and the note also has prepayment penalty clause.</P>
  
  
  <!-- Field: Page; Sequence: 15 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in February 2014. These embedded derivatives included
  certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
  the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
  of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair
  value of $39,722 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial
  Lattice Model based on the following assumptions:</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: 70%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify">Dividend yield:</TD><TD STYLE="width: 10%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">270.02</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.34</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  initial fair value of the embedded debt derivative of $39,722 was allocated as a debt discount up to the proceeds of the note
  ($25,000) with the remainder ($14,722) charged to current period operations as interest expense for the year ended December 31,
  2014. The outstanding balance as of March 31, 2015 is $2,272.</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"><U>Convertible debenture October 13, 2013:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 13, 2013, the Company issued a
  $30,000 Convertible Promissory Note which bears interest at a rate of 6%, due on October 13, 2014 and is convertible into the Company&rsquo;s
  common stock at the holder&rsquo;s option, at the conversion rate of 60% of the lowest five prior trading days immediately preceding
  the date of conversion. Default rate of interest is 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">The Company received a net of $26,100 from
  the convertible note holder; $1,500 was paid towards the legal expenses and $2,400 toward third party fees.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company identified embedded derivatives
  related to the Convertible Promissory Note entered into in October 2013. These embedded derivatives included certain conversion
  features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives
  as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date.
  At the inception of the Convertible Promissory Note, the Company determined a fair value of $57,750 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 TimesNewRomanPSMT; margin: 0">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; 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">277</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</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
  $57,750 was allocated as a debt discount up to the proceeds of the note($30,000) with the remainder ($27,750) charged to
  current period operations as non-cash interest expense for the year ended December 31, 2013.</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 year 2014 the Company issued 15,261,282 shares for
  of common stock to convert note amount of $20,087. The outstanding balance as of March 31, 2015 is $9,912.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture December 2013 and
  January 2014 </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2014,
  the Company issued two notes for a total of $228,500 Convertible Promissory Note which bears interest at a rate of 8%, due on July
  20, 2014 and January 30, 2015 and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion
  rate of 60% of the lowest three day trading price for ten trading days immediately preceding the date of conversion. Any amount
  of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per
  annum from the due date thereof until the same is paid (&ldquo;Default Interest&rdquo;) and the note also has prepayment penalty
  clause.</P>
  
  
  <!-- Field: Page; Sequence: 16 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in January 2014. These embedded derivatives included
  certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
  the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
  of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair
  value of $383,457 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial
  Lattice Model based on the following assumptions:</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: 70%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: justify">Dividend yield:</TD><TD STYLE="width: -1mm">&nbsp;</TD>
      <TD STYLE="width: 2%; text-align: left">&nbsp;</TD><TD STYLE="width: 25%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10.5pt; background-color: White">267.19% - 268.98</FONT></TD><TD STYLE="text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10.5pt; background-color: White">0.07% - 0.10</FONT></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 $383,457 was allocated as a debt discount up to the proceeds of the note
  ($228,500) with the remainder ($154,957) charged to current period operations as interest expense for the year ended December
  31, 2014. The outstanding balance as of March 31, 2015 is $115,000.</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 January 2, 2014</U></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 2, 2014 the Company issued a $11,209
  Convertible Promissory Note which bears interest at a rate of 8%, due on June 2, 2014 and is convertible into the Company&rsquo;s
  common stock at the maker&rsquo;s option, at the conversion rate of 40% of the lowest three day trading price for ten trading days
  immediately preceding the date of conversion. Any amount of principal or interest on this Note which is not paid when due shall
  bear interest at the lesser of i) 10 percent (10%) per annum or ii) the maximum rate allowed under the applicable law until paid
  in full or until the Note is reinstated.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $7,473 and was recorded as debt discount. The outstanding
  balance as of March 31, 2015 is $11,209.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debentures March 10, 2014
  and April 9, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2014,
  the Company issued Convertible notes of$6,669 and $2,679 for expenses incurred. The Convertible Promissory Notes which bears interest
  at a rate of 10%, due on April 10, 2014 and May 9, 2014 respectively,are 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 Debt discounts
  of $6,629 and $1,182 related to the Convertible Promissory Note issued on March 10, 2014 and April 9, 2014 respectively. The
  accounting treatment of debt discount financial instruments requires that the Company record the Debt discount on notes as of
  the inception date of the Convertible Promissory note and amortized it over the period of note. The Company has fully
  amortized $6,629 and $1,182 and charged to current period operations as interest expense 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">The outstanding balance as of March 31, 2015
  is $6,669 and $2,679.</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"><U>Convertible debentures March 31, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 31, 2014, the Company issued a
  $83,500 Convertible Promissory Note which bears interest at a rate of 8%, due on January 2, 2015 and is convertible into the
  Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 60% of the average of the lowest three
  day trading price for ten trading days immediately preceding the date of conversion.</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The Company identified embedded
  derivatives related to the Convertible Promissory Note issued on March 31, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $157,749 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice
  Model based on the following <FONT STYLE="background-color: White">assumptions:</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; 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">266.94</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.10</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 $157,749 was allocated as a debt discount up to the proceeds of the note
  ($83,500) with the remainder ($74,249) charged to current period operations as interest expense for the year ended December 31,
  2014.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  outstanding balance as of March 31, 2015 is $73,310.</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"><U>Convertible debentures April 1, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company issued a
  $93,000 Convertible Promissory Note for expenses incurred. The note bears interest at a rate of 10%, due on September 9, 2014
  and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 75% 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 April 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $111,104 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: 70%; 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">266.94</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.05</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 $111,104 was allocated as a debt discount up to the proceeds of the note ($93,000) with the remainder ($18,104) charged
  to current period operations as interest expense 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">The outstanding balance as of March 31, 2015
  is $93,000.</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"><U>Convertible debentures April 1, 2014 June
  1, 2014 and June 4, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31,
  2014, the Company issued three convertible notes of$25,000 each, $50,000 for expenses incurred and $25,000 transfer of loan.
  One Convertible promissory note bears interest at 16% and the other two notes bears interest rate at 10%. The notes of
  $25,000 each which are due September 9, 2014 and December 1, 2014 are convertible into the Company&rsquo;s common stock at
  the holder&rsquo;s option at conversion price of $0.05, and the note of $25,000 which is due on demand is convertible at the
  conversion rate of 75% of the average of the lowest trading price for five 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>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The Company identified Debt discount of
  $25,000 each related to the Convertible Promissory Note issued on April 1, 2014 and June 6, 2014. The accounting treatment of
  debt discount financial instruments requires that the Company record the Debt discount on note as of the inception date of
  the Convertible Promissory Note and amortized it over the period of note. The Company has fully amortized $50,000 and charged
  to current period operations as interest expense for the year ended December 31, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  outstanding balance for these three convertible notes payable as of March 31, 2015 is $25,000 each.</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"><U>Convertible debentures May 16, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 16, 2014, the Company issued a Convertible
  note of$1,975 for expenses incurred. The Convertible Promissory Note which bears interest at a rate of 8%, due on November 16,
  2014 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 Debt discount of
  $1,391 related to the Convertible Promissory Note issued on May 16, 2014. The accounting treatment of debt discount financial
  instruments requires that the Company record the Debt discount on notes as of the inception date of the Convertible
  Promissory note and amortized it over the period of note. The Company has fully amortized $1,391 and charged to current
  period operations as interest expense 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">The outstanding balance as of March 31, 2015
  is $1,975.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debentures June 30, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 30, 2014, the Company issued a Convertible
  note of$1,929 for expenses incurred. The Convertible Promissory Note which bears interest at a rate of 8%, due on December 30,
  2014 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 Debt discount of $1,417
  related to the Convertible Promissory Note issued on June 30, 2014. The accounting treatment of debt discount financial instruments
  requires that the Company record the Debt discount on notes as of the inception date of the Convertible Promissory note and amortized
  it over the period of note. The Company has fully amortized $1,417 and charged to current period operations as interest expense
  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">The outstanding balance as of March 31, 2015
  is $1,929.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debentures July 9, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 9, 2014, the Company issued a
  Convertible note of$16,056 through transfer of convertible note, accrued interest and miscellaneous loans payable. The
  Convertible Promissory Note which bears interest at a rate of 10%, due on February 9, 2015 and is convertible into the
  Company&rsquo;s common stock at the holder&rsquo;s option,at the conversion rate of 60% of the 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 July 9, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $20,585 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice
  Model based on the following assumptions:</P>
  
  <!-- Field: Page; Sequence: 19 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 2015</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; 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">294.57</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">0.07</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 $20,585 was allocated as a debt discount up to the proceeds of the note ($16,056) with the remainder ($4,529) charged
  to current period operations as interest expense 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">The outstanding balance as of March 31, 2015
  is $4,556 after $11,500 converted to shares of common stock during 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"><U>Convertible debentures August 29, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 29, 2014, the Company issued
  a Convertible note of $1,890 for expenses incurred. The Convertible Promissory Note which bears interest at a rate of 8%, due
  on December 30, 2014 and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s option,at the conversion
  rate of 60% of the 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 August 29, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $3,150 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice
  Model based on the following <FONT STYLE="background-color: White">assumptions:</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; 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">305.21</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">0.03</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
  </FONT>initial fair value of the embedded debt derivative of $3,150 was allocated as a debt discount up to the proceeds of the
  note ($1,890) with the remainder ($1,260) charged to current period operations as interest expense 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">The outstanding balance as of March 31, 2015
  is $1,890.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debentures October 1, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2014, the Company issued a
  $90,000 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company&rsquo;s
  common stock at the holder&rsquo;s option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $150,000 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: 70%; 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">309.19</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  
  <!-- Field: Page; Sequence: 20 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify"><FONT STYLE="background-color: White">The
  initial fair value of the embedded debt derivative of $150,000 was allocated as a debt discount up to the proceeds of the note
  ($90,000) with the remainder ($60,000) charged to current period operations as interest expense for the year ended December 31,
  2014.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  outstanding balance as of March 31, 2015 is $90,000.</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"><U>Convertible debentures October 1, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2014, the Company issued a
  $90,000 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company&rsquo;s
  common stock at the holder&rsquo;s option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $150,000 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice
  Model based on the following <FONT STYLE="background-color: White">assumptions:</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; 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">309.19</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">Th</FONT>e
  initial fair value of the embedded debt derivative of $150,000 was allocated as a debt discount up to the proceeds of the note
  ($90,000) with the remainder ($60,000) charged to current period operations as interest expense 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">The outstanding balance as of March 31, 2015
  is $90,000.</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"><U>Convertible debentures October 1, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2014, the Company issued a
  $14,250 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company&rsquo;s
  common stock at the holder&rsquo;s option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives
  included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company
  record the fair value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair
  value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a
  fair value of $23,750 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: 70%; 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">309.19</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The initial fair value of the embedded
  debt derivative of $23,750 was allocated as a debt discount up to the proceeds of the note ($14,250) with the remainder
  ($9,500) charged to current period operations as interest expense 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>
  
  
  <!-- Field: Page; Sequence: 21 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The outstanding balance as of March 31, 2015
  is $14,250.</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"><U>Convertible debentures October 1, 2014:</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2014, the Company issued a
  $45,000 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company&rsquo;s
  common stock at the holder&rsquo;s option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $75,000 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: 70%; 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">309.19</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  initial fair value of the embedded debt derivative of $75,000 was allocated as a debt discount up to the proceeds of the note
  ($45,000) with the remainder ($30,000) charged to current period operations as interest expense for the year ended December
  31, 2014.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  outstanding balance as of March 31, 2015 is $45,000.</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"><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 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: 70%; 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.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  outstanding balance as of March 31, 2015 is $1,819.</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">At March 31, 2015, the Company adjusted the recorded fair value
  of the derivative liability to market on the notes resulting in noncash, non-operating gain of $7,097 for the three months ended
  March 31, 2015.</P>
  
  
  <!-- Field: Page; Sequence: 22 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">During the three months ended March 31, 2015
  and 2014 the Company amortized $36,330 and $335,021, respectively, of beneficial debt discount to the operations as interest expense.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on convertible notes
  payable for the three months ended March 31, 2015 was $58,984. Interest expense of $15,103 has been charged to expenses for
  the three months ended March 31, 2015.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED PARTIES</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Convertible Notes payable - related parties
  consist of the following</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">March 31, <BR>2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify; padding-left: 5.4pt">Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,710</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,710</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,470</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,470</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued in January 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on April 3, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on May 21, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,542</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,542</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on July 1, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on November 5, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on November 5, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on December 1, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Convertible note issued on January 1, 2015, unsecured, interest at 10%, due on demand.</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">45,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Total convertible notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">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: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(325,722</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">(280,722</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Long-term convertible notes payable - related parties</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 23 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify"><U>Convertible debenture October 1, 2013</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2013 the Company issued a $17,000
  Convertible Promissory Note against the accounts payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company&rsquo;s common stock at the holder&rsquo;s option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $15,692 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $15,692 was amortized.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, 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 2014, the Company issued
  15,035,714 shares for the Conversion of note of $15,290. The outstanding balance as of March 31, 2015 is $1,710</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture October 1, 2013</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2013 the Company issued a $194,254
  Convertible Promissory Note against the account payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company&rsquo;s common stock at the holder&rsquo;s option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $179,312 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $179,312 was amortized.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year 2014, the Company issued
  340,906,979 shares for the conversion of note of $151,784. The outstanding balance as of March 31, 2015 is $42,470.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 24 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify"><U>Convertible debenture January 1, 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2014 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $45,000 and was recorded as debt discount. During the year ended December 31, 2014, debt discount
  of $45,000 was amortized. The outstanding balance as of March 31, 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"><U>Convertible debenture April 1, 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $30,000 and was recorded as debt discount. During the year ended December 31, 2014, debt discount
  of $30,000 was amortized. The outstanding balance as of March 31, 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"><U>Convertible debenture April 3, 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 3, 2014 the Company issued a $14,000
  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</P>
  
  
  <!-- Field: Page; Sequence: 25 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">immediate steps required to get the appropriate
  level of approval from shareholders or the board of directors, where applicable to raise the number of authorized shares to satisfy
  the Notice of Conversion. In the event of default the Company has to pay 150% time the sum of outstanding principal and accrued
  interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $9,333 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $9,333 was amortized. The outstanding balance as of March 31, 2015 is $14,000.</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"><U>Convertible debenture May 21, 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 21, 2014 the Company issued a $4,000
  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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $4,000 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $4,000 was amortized. The outstanding balance as of March 31, 2015 is $4,000.</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"><U>Convertible debenture June 4, 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 4, 2014 the Company issued a $50,000
  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>
  
  <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 4, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory</P>
  
  
  <!-- Field: Page; Sequence: 26 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">Note, the Company determined a fair value
  of $46,875 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">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; 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">290.02</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.00</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">&nbsp;</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 $46,875 was allocated as a debt discount for the year ended December 31, 2014. During the year ended
  December 31, 2014, debt discount of $46,875 was amortized.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year 2014, the Company issued
  19,458,498 shares for the conversion of note of $19,458. The outstanding balance as of March 31, 2015 is $30,542.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture July 1, 2014 </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 1, 2014 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $30,000 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $30,000 was amortized. The outstanding balance as of December 31, 2014 is
  $45,000.</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"><U>Convertible debenture November 5, 2014
  </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 5, 2014 the Company issued a
  $4,000 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>
  
  
  <!-- Field: Page; Sequence: 27 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $2,667 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $2,667 was amortized. The outstanding balance as of March 31, 2015 is $4,000.</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"><U>Convertible debenture November 5, 2014
  </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On November 5, 2014 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $30,000 and was recorded as debt discount. During the year ended December 31, 2014, debt discount
  of $30,000 was amortized. The outstanding balance as of March 31, 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"><U>Convertible debenture December 1, 2014
  </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 1, 2014 the Company issued a
  $4,000 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $2,667 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $2,667 was amortized. The outstanding balance as of March 31, 2015 is $4,000.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 28 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify"><U>Convertible debenture January 1, 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 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $30,000 and was recorded as debt discount. During the three months ended March 31, 2015, debt discount
  of $30,000 was amortized. The outstanding balance as of March 31, 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">For the three months ended March 31, 2015 and 2014, interest
  expenses charged on the above notes is $8,471 and $6,306, respectively. Accrued interest on convertible notes payable &ndash;
  related parties as of March 31, 2015 and December 31, 2014 was $47,404 and $38,933, respectively.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 29 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">NOTE 10 - NOTES PAYABLE - RELATED PARTIES</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">Notes payable - related parties consist of the following:</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">March 31, <BR>2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2014</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify; padding-left: 5.4pt">Note payable to a related individual, secured by tangible and intangible assets of the Company, interest at 16% per annum, principal and interest due April 1, 2000, past due.&nbsp;&nbsp;Note is convertible into common stock of the Company at $0.10 per share. Note is in default. (2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,080,973</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,080,973</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Note payable to a related individual, interest at 8% per annum,past due. Note is in default. (1)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable to related individuals, unsecured, interest at 10%,due on demand. (3)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Notes payable to related individual, unsecured, interest at 12%,due on demand. (4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,633</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">28,633</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Total notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,138,106</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: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,138,106</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">(2,138,106</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Long-term notes payable - related parties</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>&nbsp;<BR>Maturities of notes payable - related parties are as follows:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;<BR>Year Ending March 31,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Amount</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">2016</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,138,106</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;<BR>Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,138,106</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on notes payable
  &ndash; related parties as of March 31, 2015 and December 31, 2014 was $444,003 and $380,080, respectively. During the three
  months ended March 31, 2015, total interest expense to related party was $63,923.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">This note was issued for the acquisition
  of AFI on January 28, 2012. As of March 31, 2015 and December 31, 2014, the Company had accrued interest on the note in the amount
  of $253,589 and $233,863, respectively.</FONT></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">This note was originally issued for $450,000.
  During the year ended December 31, 2013, the principle value of $450,000 along with accrued interest of $837,369 was converted
  to two new notes for $1,087,370 and $200,000. During the year 2013 the Company issued 2,100,000 shares of the common stock against
  settlement of the new note of $200,000. In the year 2014, the Company issued 3,500,000 shares of common stock for Note value of
  $35,000 and accrued interest of $6,650. The Balance note along with the balance accrued interest of $130,603 was transferred to
  another note holder for $1,080,973. The accrued interest as of December 31, 2014 is $177,024.</FONT></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">During the year ended December 31, 2013,
  one of the note holder for $15,000 along with accrued interest of $13,300 transferred its loan to a non- related party. During
  the year 2013 the Company issued 1,800,000 shares of the common stock to settle$28,300 of note of non- related party.. Accrued
  interest as of March 31, 2015 was $11,288. </FONT></TD></TR></TABLE>
  
  <!-- Field: Page; Sequence: 30 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: normal 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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      <!-- Field: /Page -->
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 2015</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">4)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">During the year 2014, the Company issued
  the note value of $26,000 in cash and $2,632 for expense incurred. Accrued interest as of March 31, 2015 was $2,102. </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 11 &ndash; FAIR VALUE OF FINANCIAL INSTRUMENTS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 820 defines fair value as the price that
  would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
  measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the
  asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs
  can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on
  the observability of those inputs.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following tables set forth by level within
  the fair value hierarchy the Company&rsquo;s financial assets and liabilities that were accounted for at fair value as of March
  31, 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 March 31, 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 March 31, 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 March 31, 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">$</TD><TD STYLE="width: 10%; text-align: right">377,362</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">377,362</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">$</TD><TD STYLE="font-weight: bold; text-align: right">377,362</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">377,362</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides a summary of
  changes in fair value of the Company&rsquo;s Level 3 financial liabilities as of March 31, 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">$</TD><TD STYLE="width: 18%; text-align: right">372,939</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Initial fair value of debt derivatives at note issuances</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,520</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Extinguished derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Mark-to-market at March 31, 2015 - Embedded debt derivatives</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(7,097</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">Balance, March 31, 2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">377,362</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 gain for the period included in earnings relating to the liabilities held at March 31, 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">7,097</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>
  
  
  <!-- Field: Page; Sequence: 31 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Preferred Stock</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is authorized to
  issue 200 preferred shares of $0.0001 par value. As of March 31, 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/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is authorized to issue
  2,500,000,000 shares of $0.0001 par value of common stock. As of March 31, 2015 and December 31, 2014 the Company had
  1,166,978 and 969,086 shares of common stock as issued and outstanding.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt 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 197,892 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">NOTE 13 - OPTIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted FASB ASC 718, &ldquo;Share-Based
  Payments&rdquo; (&ldquo;ASC 718&rdquo;) to account for its stock options. The Company estimates the fair value of each stock award
  at the grant date by using the Black-Scholes option pricing model. The assumptions used to calculate the fair value of options
  granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized
  only for those options expect to vest, with forfeitures estimated at the date of grant based on our historical experience and future
  expectations.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&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: 70%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">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: 46%; text-align: justify; padding-left: 0.75pt">Outstanding as of January 1, 2015</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 25%; text-align: right">370,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 22%; 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: justify; padding-left: 0.75pt">Granted</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: justify; padding-left: 0.75pt">Exercised</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: justify; padding-bottom: 1pt; padding-left: 0.75pt">Cancelled</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">Outstanding at March 31, 2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">370,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1.34</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  <!-- Field: Page; Sequence: 32 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">March 31, 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: justify">Common stock options outstanding and exercisable
  as of March 31, 2015 are:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="11" STYLE="text-align: center; border-bottom: Black 1pt solid">Options Outstanding</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid">Options Exercisable</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Expiration <BR>Date</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Exercise Price</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number shares outstanding</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Contractual Life (Years)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number Exercisable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 35%; text-align: justify; padding-left: 0.75pt">October&nbsp;&nbsp;1, 2018</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0.01</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">70,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">4.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">66,644</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0.01</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">January 2, 2019</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.65</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">237,124</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.65</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 0.75pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">370,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">303,768</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2013,
  the Company granted 300,000 stock options with an exercise price of $1.65 out of which 75,000 were immediately vested and balance
  vesting over three years and expiring six years from issuance date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the vested portion of $34,028
  was charged to expenses and additional paid in capital during the three months ended March 31, 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">The fair value of these stock options granted
  and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify"><font style="font-size: 10.5pt">&nbsp;<B STYLE="text-decoration: none">Significant&nbsp;assumptions:</b></font></TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk-free interest rate at grant date</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><font style="font-size: 10.5pt">1.04%-0.89</font></TD><TD STYLE="text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected stock price volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><font style="font-size: 10.5pt">199.38%-344.22</font></TD><TD STYLE="text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected dividend payout</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="width: 56%; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected option life-years</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">6</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
      </TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 14 &ndash; SUBSEQUENT EVENTS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 20, 2015, Fuelstream, Inc. (the
  &ldquo;Company&rdquo;) 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) one (1) year 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.</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; color: red">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>ITEM 2. MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following
  discussion of the financial condition and results of operations of Fuelstream, Inc. (hereafter, &ldquo;Fuelstream,&rdquo; the
  &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;our,&rdquo; or &ldquo;us&rdquo;) should be read in conjunction with the
  Unaudited Financial Statements and related Notes thereto included herein. This discussion may contain forward-looking
  statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
  1934, including, without limitation, statements regarding the Company&rsquo;s expectations, beliefs, intentions, or future
  strategies that are signified by the words &quot;expects,&quot; &quot;anticipates,&quot; &quot;intends,&quot;
  &quot;believes,&quot; or similar language. Actual results could differ materially from those projected in the forward looking
  statements. Prospective investors should carefully consider the information set forth herein, and the Company cautions
  investors that its business and financial performance is subject to substantial risks and uncertainties.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Overview</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We are an in-wing
  and on-location supplier and distributor of aviation fuel to corporate, commercial, military, and privately-owned aircraft
  throughout the world. We also provide a variety of ground services either directly or through our affiliates, including
  concierge services, passenger and baggage handling, landing rights, coordination with local aviation authorities, aircraft
  maintenance services, catering, cabin cleaning, customs approvals, and third-party invoice reconciliation. Our personnel
  assist customers in flight planning and aircraft routing aircraft, obtaining permits, arranging overflies, and flight follow
  services.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our core business has
  developed as a result of a joint venture and eventual acquisition of Aviation Fuel International, Inc., now a wholly-owned subsidiary
  of the Company (&ldquo;AFI&rdquo;). The Company&rsquo;s principal sources of revenues are expected to result from the gross selling
  price of fuel delivery contracts and associated services. Expenses which comprise the costs of goods sold are expected to include
  the acquisition price of fuel transported, as well as operational and staffing costs of the trucks and other vehicles used for
  delivery. General and administrative expenses have been comprised of administrative wages and benefits; occupancy and office expenses;
  outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. Selling
  and marketing expenses include selling/marketing wages and benefits; advertising and promotional expenses; travel and other miscellaneous
  related expenses.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 21, 2012
  the Company entered into an agreement to create a fuel logistics joint venture with South African based Global Airways
  (&quot;Global&quot;). Global is an international air transport organization whose activities cover acquisition,
  refurbishment, heavy maintenance, leasing and chartering of air crafts throughout South Africa. We expect that this
  transaction will expand the Company&rsquo;s international footprint in a market that is developing standardized systems to
  meet the aviation fueling needs of commercial and cargo carriers.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The partnership with
  Global underlines the company's strategic plan to generate new revenue streams by partnering with aircraft leasing and MRO businesses
  and includes the development, operation and management of the fuel storage, supply and logistic operations located in South Africa.
  It is anticipated that the partnership will oversee the logistics delivery of up to 3 Million gallons of Jet-A Fuel per month by
  the end of 2013 if the Company is able to secure sufficient means of financing the purchase of such fuel.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our ability to generate
  revenues during the year 2015 and beyond depends substantially upon the Company&rsquo;s resources available in order to develop
  and grow the business of AFI as a supplier of fuel and logistics. Such efforts require significant systems development, marketing
  and personnel costs, which, in turn, require substantial funding. If we are unable to obtain such funding, its ability to generate
  revenues will be significantly impaired and we may be unable to continue operations.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Because the Company has
  incurred losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards,
  given the uncertainty of the Company being able to utilize such loss carryforwards in future years. We anticipate incurring additional
  losses during the coming year.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Results of Operations</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Following is management&rsquo;s
  discussion of the relevant items affecting results of operations for the three month periods ended March 31, 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 $-0- during the three months ended March 31, 2015 as compared to $47,414 for the three
  months ended March 31, 2014. In the future, the Company&rsquo;s sole source of revenue is expected to be related to fuel
  delivery contracts and associated services.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Cost of
  Sales.</B> Our cost of sales for the three months ended March 31, 2015 was $-0- as compared to $36,338 for the three months
  ended March 31, 2014. Our cost of sales consisted principally of the acquisition price of fuel and other petro chemicals
  delivered to customers and clients, other related services provided directly or outsourced through our affiliates, as well as
  operational and staffing costs with respect thereto. The increase is a direct correlation to the increase in sales as
  described above.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Selling,
  General and Administrative Expenses. </B>Selling, general and administrative expenses for the three months ended March 31,
  2015 were $118,310 compared to $450,133 during the three months ended March 31, 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 fuel brokerage business.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Other
  Income (Expense)</B>. The Company had net other expenses of $172,286 for the three months ended March 31, 2015 compared to
  $490,595 during the three months ended March 31, 2014. Other expenses incurred were comprised primarily of interest expenses
  related to notes payable including amortization of debt discount and setoff with gain on change in derivative liability and a
  gain on the conversion of debt. During the three months ended March 31, 2015 and 2014, interest expense was $179,383 and
  $728,975, respectively. Included in interest expense was the amortization of debt discount of $36,330 and $380,021 for the
  three months ended March 31, 2015 and 2014, respectively. The gain on change in derivative liability was $7,097 and $238,380
  for the three months ended March 31, 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 $290,596 for the three months ended March 31, 2015 compared to $929,652 during the
  three months ended March 31, 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 March 31, 2015,
  our primary source of liquidity consisted of $152 in cash and cash equivalents. We hold most of our cash reserves in local checking
  accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and
  long-term loans, and through the private placement of our common stock.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have sustained significant
  net losses which have resulted in a total stockholders&rsquo; deficit at March 31, 2015 of $6,885,803 and are currently experiencing
  a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. We anticipate
  a net loss for the year ended December 31, 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.</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">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There is presently no
  agreement in place with any source of financing for the Company and we cannot assure you that the Company will be able to raise
  any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will
  likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect the Company and its business,
  and may cause us to cease operations. Consequently, shareholders could incur a loss of their entire investment in the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white"><B>Off-Balance
  Sheet Arrangements</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; 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">&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>
  
  <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>
  
  
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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">As of March 31, 2015,
  the end of our first quarter, we carried out an evaluation, under the supervision of our Chief Executive Officer and Controller,
  of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded
  that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report. Our
  board of directors has only one member. We do not have a formal audit committee.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Changes in Internal Control over Financial
  Reporting</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There have been no
  significant changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 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 AFI. AFI filed under the commercial lien
  laws as required to secure a lien on the planes fueled in order to protect their receivable due from Ryan. Disagreements between
  the parties resulted in both parties filing separate lawsuits in three actions. Ryan filed a cause of action in Case No. 09-57580,
  <U>Ryan International Airlines, Inc. v. Aviation Flight Services, LLC (&ldquo;AFS&rdquo;) and Aviation Fuel International, Inc.,
  (&ldquo;AFI&rdquo;)</U>, and sought recovery of $1,491,308.66 allegedly paid to AFS as pre-payment of aviation fuel and flight
  services under a contractual relationship between Ryan and AFS. AFI moved to dismiss the action, to which, Ryan has subsequently
  filed a notice of removal to the Federal District Court for the Northern District of Illinois, Bankruptcy Division Case No.: 12-80802.
  AFI filed an action for breach of contract for Ryan&rsquo;s failure to pay certain Jet Fuel invoices for the delivery of fuel in
  the amount of $678,000 plus interest; <U>Aviation Fuel International v. Ryan International Airlines, Inc., a Kansas corporation,
  Wells Fargo Bank Northwest, Trustee N.A., a Utah corporation, RUBLOFF 757-MSN24794LLC, an Illinois limited liability company, RYAN
  767 LLC, an Illinois limited liability company, AFT TRUST SUB I, a Delaware corporation, RYAN 767 N123 LLC, an Illinois limited
  liability company, and RUBLOFF 440 LLC, an Illinois corporation</U>, Civil Action Case No. CACE 10-037788-04. AFI also filed the
  corresponding claims of liens under the FAA Aircraft Registration Branch, for each plane, registered and tail wing number listed
  therein. This action has also been recently noticed for been removal to the Federal District Court for the Northern District of
  Illinois, Bankruptcy Division Case No.: 12-80802. In addition, as a result of Ryan&rsquo;s filing a Federal Involuntary Bankruptcy
  Petition against Aviation Flight Services (&ldquo;AFS&rdquo;) on June 10, 2010, Case No.: 10-27313-JKO, (S.D. of Fla.), our subsidiary
  AFI, also filed and was discharged as a creditor in the amount of $269,000. However, the obligations for the unpaid fuelings owed
  to AFI still remain outstanding as obligations due to AFI.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Southern Sky Air Tours,
  d/b/a Myrtle Beach Direct Air and Tours (Direct Air)</I>. On or about March 13, 2012, Southern Sky Air Tours, d/b/a Myrtle Beach
  Direct Air and Tours (&ldquo;Direct Air&rdquo;) &#8213; a public charter operator &#8213; ceased operations. Direct Air has subsequently
  filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts (Worcester)(Case no. 12-40944).
  The Company currently has $122,000 in cash in escrow with Suntrust Bank, representing a partial payment by Direct Air for Fuel.
  This action is currently pending before the court, as it relates to the collection of the garnishment.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><I>&nbsp;</I></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 197,892 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: 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>
  
  <!-- Field: Page; Sequence: 38 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: italic 9pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></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: 39 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 9pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><B>ITEM 6.&#9;EXHIBITS</B>&#9;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -58.5pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -22.5pt">The following
  documents are filed as exhibits to this Form 10-Q:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -58.5pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>INDEX TO EXHIBITS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td style="width: 13%; padding-top: 6.95pt; padding-bottom: 3.7pt; text-decoration: underline; text-align: justify"><font style="font-size: 10.5pt"><b><u>Number</u></b></font></td>
      <td style="width: 5%; padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <td style="width: 82%; padding-top: 6.95pt; padding-bottom: 3.7pt; text-decoration: underline; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif"><b><u>Exhibits</u></b></font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">3.1</font></td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Amended and Restated Certificate of Incorporation of Fuelstream, Inc</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">3.2</font></td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Amended and Restated Bylaws of Fuelstream, Inc.(1) </font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">10.1</font></td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Form of Indemnification Agreement (2)</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">10.2</font></td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">2012 Equity Incentive Plan (2)</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">31</font></td>
      <td style="padding-top: 0.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif"><A HREF="ex31302certification.htm">Certification by Chief Executive Officer, John D. Thomas, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</A>.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">32</font></td>
      <td style="padding-top: 0.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif"><A HREF="ex32906certification.htm">Certification by Chief Executive Officer, John D. Thomas, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</A>.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid; padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(1) Filed as an Exhibit to the Company&rsquo;s
  Current Report on Form 8-K, filed on June 17, 2011.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(2) Filed as an Exhibit to the Company&rsquo;s
  Current Report on Form 8-K, filed on September 18, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
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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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  
  <!-- Field: Page; Sequence: 40 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><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">
  <tr style="vertical-align: top">
      <td style="width: 46%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="width: 51%; padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">FUELSTREAM, INC.</P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Date:
      June 19, 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: 10.5pt Times New Roman, Times, Serif">BY: <u>/s/ John D. Thomas</u>__________________</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">John D. Thomas</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Chief Executive Officer</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>
  
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metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "f10q_flst33115.htm", "secsgml_size_bytes": 386764}]
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": "15943249"}, "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 March 31, 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.
  (Name of Small Business Issuer in Its Charter)
  Delaware
  87-0561426
  (State
          or Other Jurisdiction
  of Incorporation
          or Organization)
  (IRS
          Employer
  Identification
          No.)
  510 Shotgun Road, Suite 110
  Fort Lauderdale, Florida
  33326
  (Address of Principal Executive Offices)
  (Zip Code)
  (954) 423-5345
  (Issuer's Telephone Number)
  (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
  Table of Contents
  Indicate by check mark
  whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
  been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
  Indicate by check mark
  whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
  to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
  (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No []
  Indicate by check mark
  whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company.
  See definition of "large accelerated filer,""accelerated filer," and "smaller reporting company in
  Rule 12b-2 of the Exchange Act. (Check one):
  Large Accelerated Filer [  ]
  Accelerated Filer [  ]
  Non-Accelerated Filer [  ]
  Smaller reporting company [X]
  Indicate by check mark
  whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
  APPLICABLE ONLY TO ISSUERS INVOLVED IN
  BANKRUPTCY
  PROCEEDINGS DURING THE PRECEDING FIVE YEARS
  Check whether the registrant
  has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution
  of securities under a plan confirmed by a court. Yes [ ] No [ ]
  APPLICABLE ONLY TO CORPORATE ISSUERS
  State the number of shares
  outstanding of each of the issuer's classes of common equity, as of the latest practicable date. As of June 2, 2015, the
  Company had outstanding 1,166,978 shares of common stock, par value $0.0001 per share.
  Table of Contents
  2
  PART
  I
  FINANCIAL
  INFORMATION
  The
  Condensed
  Consolidated
  Financial Statements of the Company are prepared as of
  March 31, 2015.
  ITEM
  1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q
  CONTENTS
  Condensed Consolidated Balance Sheets as of March 31, 2015 (unaudited) and December 31,2014
  4
  Condensed Consolidated Statements of Operations for the three month periods ended March 31, 2015 and 2014 (unaudited)
  5
  Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 2015 and 2014 (unaudited)
  6
  Notes to the Unaudited Condensed Consolidated Financial Statements
  7
  Table of Contents
  3
  FUELSTREAM, INC.
  Condensed Consolidated Balance Sheets
  ASSETS
  March 31,
  December 31,
  2015
  2014
  (Unaudited)
  CURRENT ASSETS
  Cash and cash equivalents
  $
  152
  $
  811
  Accounts receivable, net of allowance
  28,000
  28,000
  Total Current Assets
  28,152
  28,811
  TOTAL ASSETS
  $
  28,152
  $
  28,811
  LIABILITIES AND STOCKHOLDERS' DEFICIT
  CURRENT LIABILITIES
  Accounts payable
  $
  962,169
  $
  959,469
  Due to related parties
  61,973
  52,973
  Accrued expenses
  1,373,543
  1,215,086
  Convertible debenture/notes payable - short term (net of
  discount of $6,026 and $6,358, respectively)
  640,470
  634,141
  Convertible notes payable - related parties
  325,722
  280,722
  Notes payable
  1,034,610
  1,034,610
  Notes payable - related parties
  2,138,106
  2,138,106
  Derivative liability
  377,362
  372,939
  Total Current Liabilities
  6,913,955
  6,688,046
  TOTAL LIABILITIES
  6,913,955
  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, 1,166,978 and 969,086
  shares issued and outstanding, respectively
  117
  97
  Additional paid-in capital
  52,623,744
  52,559,736
  Accumulated deficit
  (59,509,664
  )
  (59,219,068
  )
  Total Stockholders' Deficit
  (6,885,803
  )
  (6,659,235
  )
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $
  28,152
  $
  28,811
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  Table of Contents
  4
  FUELSTREAM, INC.
  Condensed Consolidated Statements of Operations
  (Unaudited)
  For the Three Months Ended
  March 31,
  2015
  2014
  NET SALES
  $
  —
  $
  47,414
  COST OF SALES
  —
  36,338
  GROSS MARGIN
  —
  11,076
  OPERATING EXPENSES
  Selling, general and administrative
  118,310
  450,133
  Total Operating Expenses
  118,310
  450,133
  LOSS FROM OPERATIONS
  (118,310
  )
  (439,057
  )
  OTHER INCOME (EXPENSES)
  Gain on change in fair value of derivative liability
  7,097
  238,380
  Interest expense (including amortization of debt discount
  of $36,330 and $380,021, respectively)
  (179,383
  )
  (728,975
  )
  Total Other Expenses
  (172,286
  )
  (490,595
  )
  LOSS BEFORE INCOME TAXES
  (290,596
  )
  (929,652
  )
  INCOME TAX EXPENSE
  —
  —
  NET LOSS
  $
  (290,596
  )
  $
  (929,652
  )
  BASIC AND DILUTED:
  Net loss per common share
  $
  (0.25
  )
  $
  (41.04
  )
  Weighted average shares outstanding
  1,166,978
  22,655
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  Table of Contents
  5
  FUELSTREAM, INC.
  Condensed Consolidated Statements of Cash Flows
  (Unaudited)
  For the Three Months Ended
  March 31,
  2015
  2014
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss
  $
  (290,596
  )
  $
  (929,652
  )
  Adjustments to reconcile net loss to net
  cash used in operating activities:
  Common stock issued for services and finance expenses
  —
  163,500
  Stock based compensation
  34,028
  34,028
  Operating expenses incurred by noteholders on behalf of the Company
  500
  71,259
  Non-cash interest expenses
  5,519
  221,664
  Change in fair value of derivative liability
  (7,097
  )
  (238,380
  )
  Amortization of debt discounts
  36,330
  380,021
  Changes in operating assets and liabilities:
  Accounts payable and accrued expenses
  206,157
  191,610
  Due to related parties
  9,000
  Net Cash Used in Operating Activities
  (6,159
  )
  (105,950
  )
  CASH FLOWS FROM INVESTING ACTIVITIES:
  —
  —
  CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from notes payable
  5,500
  279,950
  Payments on notes payable
  —
  (174,000
  )
  Net Cash Provided by Financing Activities
  5,500
  105,950
  NET (DECREASE) IN CASH AND CASH EQUIVALENTS
  $
  (659
  )
  $
  —
  CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
  811
  —
  CASH AND CASH EQUIVALENTS, END OF PERIOD
  $
  152
  $
  —
  SUPPLEMENTAL CASH FLOW INFORMATION
  Cash Payments For:
  Interest
  $
  76
  $
  1,725
  Income taxes
  $
  —
  $
  —
  Non-cash investing and financing activity:
  Initial derivative liability on convertible note payable
  $
  11,520
  $
  553,664
  Beneficial conversion feature on convertible note credited to additional paid in capital
  $
  30,000
  $
  54,816
  Common stock issued for settlement of notes payable and accrued interest
  $
  —
  $
  142,746
  Reclassification from due to related party to convertible note payable - related party
  $
  —
  $
  45,000
  Reclassification from accounts payable to convertible note payable - related party
  $
  45,000
  $
  —
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  Table of Contents
  6
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 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 three months ended March 31, 2015 are
  not necessarily indicative of the results to be expected for the year ending December 31, 2015.
  Organization and Nature of Operation
  Fuelstream, Inc. (the
  "Company") was incorporated under the laws of the State of Delaware on July 12, 1996 under the name of
  "Durwood, Inc." From April 6, 1999 to April 9, 2010, the Company operated as a sports marketing firm under
  the name of "Sportsnuts, Inc." On April 9, 2010, the Company changed its name to Fuelstream, Inc. and changed
  its business model to become a fuel transportation and logistics company.
  On April 11, 2011, the Company entered
  into a joint venture agreement ("Joint Venture") with Aviation Fuel International, Inc., a Florida corporation
  ("AFI") and a purchaser and reseller of aviation fuel for commercial and private aircraft. The Joint Venture
  required the Company to contribute up to $200,000 in respect of supplying aviation fuel to various commercial aircraft via
  tanker trucks which were intended to be acquired by the Joint Venture. The Company ultimately contributed $183,500 in
  connection with the Joint Venture. On January 18, 2012, the Joint Venture was terminated upon completion of the acquisition
  of AFI, which is now a wholly-owned subsidiary of the Company (refer to note 3).
  On May 10, 2012, the Company along
  with two partners formed AFI South Africa LLC ("AFI SA"), immediately the Company purchased shares of the other
  partners to become 100% owner of AFI SA (refer to note 3). AFI SA was effective as Limited Liability Company under the Act by
  the filing organization with the office of the Secretary of State of Florida on May 11, 2012. The Company has been organized
  for the purpose of partnering with Global Aviation for brokering the sale of Fuel for aircraft in South Africa.
  Use of Estimates
  The preparation of unaudited condensed
  consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires
  management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
  assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
  period. Actual results could differ from those estimates.
  Revenue Recognition
  The Company recognizes revenue in
  accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition ("ASC 605-10")
  which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an
  arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is
  reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature
  of the selling prices of the products delivered and the collectability of those amounts.
  Table of Contents
  7
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  ASC605-10 incorporates Accounting
  Standards Codification subtopic 605-25, Multiple-Element Arrangements("ASC 605-25"). ASC 605-25 addresses
  accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use
  assets.
  Principles of Consolidation
  The consolidated financial statements have
  been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and include
  the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated
  Cash
  The Company considers cash to consist
  of cash on hand and temporary investments having an original maturity of 90 days or less that are readily convertible into
  cash.
  Income Taxes
  The Company has adopted Accounting Standards
  Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities
  and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
  tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
  Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily
  of timing differences such as deferred officers' compensation and stock based compensation accounting.
  Net Loss per share
  The Company complies with accounting and
  disclosure requirements of FASB ASC 260, "Earnings Per Share." Net loss per ordinary share is computed by dividing
  net loss applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Common
  share equivalents are excluded from the diluted earnings (loss) per share computation if their effect is anti-dilutive.
  Stock based compensation
  The Company follows Accounting
  Standards Codification subtopic 718-10, Compensation ("ASC 718-10") which requires that all share-based payments
  to both employees and non-employees be recognized in the income statement based on their fair values.
  Stock based compensation recorded in
  the unaudited condensed consolidated financial statements for the three months ended March 31, 2015 and 2014 were $34,028 and
  $34,028, respectively.
  Financial Instruments
  On January 1, 2008, the Company adopted FASB
  ASC 820-10-50, "Fair Value Measurements." This guidance defines fair value, establishes a three-level valuation hierarchy
  for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined
  as follows:
  -
  Level
  1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities inactive
  markets
  .
  Table of Contents
  8
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  - Level 2 inputs to the
  valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are
  observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
  instrument.
  - Level 3 inputs to valuation methodology
  are unobservable and significant to the fair measurement.
  The carrying amounts reported in
  the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial
  instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such
  instruments and their expected realization and their current market rate of interest.
  Derivative Liabilities
  The Company assessed the classification of
  its derivative financial instruments as of March 31, 2015, which consist of convertible instruments and rights to shares of the
  Company's common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.
  ASC 815 generally provides three criteria
  that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing
  derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks
  of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host
  contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured
  at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings
  as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
  instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is
  deemed to be conventional, as described.
  Convertible Instruments
  The Company evaluates and accounts for conversion
  options embedded in its convertible instruments in accordance with professional standards for "Accounting for Derivative
  Instruments and Hedging Activities".
  Professional standards generally provide
  three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them
  as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics
  and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of
  the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
  re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported
  in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered
  a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be
  conventional as defined under professional standards as "The Meaning of "Conventional Convertible Debt Instrument".
  The Company accounts for convertible instruments
  (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance
  with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those
  professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary,
  discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences
  between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion
  price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest
  date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded
  in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of
  the note transaction and the effective conversion price embedded in the note.
  Table of Contents
  9
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  ASC 815-40 provides that, among other things,
  generally, if an event is not within the entity's control could or require net cash settlement, then the contract shall be
  classified as an asset or a liability.
  Recently adopted accounting pronouncements
  In April 2015, the Financial Accounting Standards
  Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest
  (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in this ASU require that debt issuance costs
  related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that
  debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected
  by the amendments in this ASU. The amendments are effective for financial statements issued for fiscal years, and interim periods
  within those fiscal years, beginning after December 15, 2015. The amendments are to be applied on a retrospective basis, wherein
  the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance.
  We do not expect the adoption of ASU 2015-03 to have a material effect on our financial position, results of operations or cash
  flows.
  In February 2015, the FASB issued ASU No.
  2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which is intended to improve targeted areas of consolidation
  guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized
  debt obligations, collateralized loan obligations, and mortgage-backed security transactions). The ASU focuses on the consolidation
  evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In
  addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards
  Codification and improves current U.S. GAAP by placing more emphasis on risk of loss when determining a controlling financial interest,
  reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable
  interest entity ("VIE"), and changing consolidation conclusions for companies in several industries that typically
  make use of limited partnerships or VIEs. The ASU will be effective for fiscal years, and interim periods within those fiscal years,
  beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. We do not expect the adoption
  of ASU 2015-02 to have a material effect on our financial position, results of operations or cash flows.
  In January 2015, the FASB issued ASU No.
  2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation
  by Eliminating the Concept of Extraordinary Items." This ASU eliminates from U.S. GAAP the concept of extraordinary items.
  ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A
  reporting entity may apply the amendments prospectively. We do not expect the adoption of ASU 2015-01 to have a material effect
  on our financial position, results of operations or cash flows.
  In November 2014, the FASB issued ASU No.
  2014-17, "Business Combinations (Topic 805): Pushdown Accounting." This ASU provides an acquired entity with an option
  to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control
  of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the
  change-in-control event occurs. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable.
  ASU 2014-17 was effective on November 18, 2014. The adoption of ASU 2014-17 did not have any effect on our financial position,
  results of operations or cash flows.
  In November 2014, the FASB issued ASU 2014-16,
  "Derivatives and Hedging (Topic 815)." ASU 2014-16 addresses whether the host contract in a hybrid financial instrument
  issued in the form of a share should be accounted for as debt or equity. ASU 2014-16 is effective for fiscal years, and interim
  periods within those fiscal years, beginning after December 15, 2015. We do not currently have issued, nor are we investors in,
  hybrid financial instruments. Accordingly, we do not expect the adoption of ASU 2014-16 to have any effect on our financial position,
  results of operations or cash flows.
  Table of Contents
  10
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  In August 2014, the FASB issued ASU No. 2014-15,
  "Presentation of Financial Statements - Going Concern (Subtopic 205-40)". ASU 2014-15 provides guidance related to management's
  responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide
  related footnote disclosure. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and for interim and annual
  periods thereafter. Early application is permitted. We do not expect the adoption of ASU 2014-15 to have a material effect on our
  financial position, results of operations or cash flows.
  In June 2014, the FASB issued ASU No. 2014-12,
  "Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide
  That a Performance Target Could Be Achieved after the Requisite Service Period." This ASU requires that a performance target
  that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12
  is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. We do not expect
  the adoption of ASU 2014-12 to have a material effect on our financial position, results of operations or cash flows.
  In May 2014, the FASB issued ASU No. 2014-09,
  "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 affects any entity using U.S. GAAP that either enters
  into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless
  those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). ASU 2014-09 is effective
  for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We do not expect the adoption
  of ASU No. 2014-09 to have a material effect on our financial position, results of operations or cash flows.
  In April 2014, the FASB issued ASU No. 2014-08,
  "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) and Reporting Discontinued
  Operations and Disclosures of Disposals of Components of an Entity." ASU 2014-08 amends the definition for what types of asset
  disposals are to be considered discontinued operations, as well as amending the required disclosures for discontinued operations
  and assets held for sale. ASU 2014-08 is effective for fiscal years, and interim periods within those fiscal years, beginning on
  or after December 15, 2014. The adoption of ASU 2014-08 did not have any effect on our financial position, results of operations
  or cash flows.
  Recent accounting pronouncements issued by
  the FASB and the SEC did not or are not believed by management to have a material impact on the Company's present or future unaudited
  condensed consolidated financial statements.
  Reclassification
  Certain reclassifications have been made
  to prior periods' data to conform to the current period's presentation. These reclassifications had no effect on reported income
  or losses
  NOTE 2 -GOING
  CONCERN CONSIDERATIONS
  The accompanying unaudited condensed
  consolidated financial statements have been prepared using generally accepted accounting principles applicable to a going
  concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As
  reported in its Annual Report on Form 10-K for the year ended December 31, 2014, the Company has an accumulated deficit of
  $59,219,068 from inception of the Company through December 31, 2014. It should be noted that prior to the acquisition of AFI
  as discussed in Note 3, the Company had an accumulated deficit of $32,105,264 as reported in its Annual Report on Form 10-K
  for the year ended December 31, 2011. The accumulated deficit as of March 31, 2015 was $59,509,664 and the total
  stockholders' deficit at March 31, 2015 was $6,885,803 and had working capital deficit (current liabilities minus
  current assets) of $6,885,803, 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:
  Table of Contents
  11
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The Company's management continues
  to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient
  funds, therefore, as to be able to operate over the next twelve months. The Company is attempting to improve these conditions by
  way of financial assistance through issuances of additional equity and by generating revenues by brokering the sale of aircraft
  fuel. No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to
  management.
  The ability of the Company to continue as
  a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually
  attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments
  relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that
  might result from the outcome of these uncertainties.
  NOTE 3 -ACQUISITION
  On January 18, 2012 the Company
  completed the acquisition of 100% of the equity of Aviation Fuel International, Inc., a Florida corporation
  ("AFI"). AFI is a purchaser and reseller of aviation fuel for commercial and private aircraft. The consideration
  for the acquisition of AFI consisted of 7,400,000 shares of restricted common stock, loan receivable adjusted for $183,500
  and a note payable in the amount of $1,000,000. As part of the acquisition, the Company recorded goodwill in the amount of
  $6,000,410 on June 25, 2013. The Company disaffirmed the note payable of $1,000,000. However, until the Company receives a
  judicially approved release, the note payable will remain on the financial statements and is included in the balance sheet as
  of March 31, 2015. Prior to the acquisition, AFI had accumulated notes payable of $1,356,300 and accounts payable of
  $536,610. These liabilities have been recorded in the condensed consolidated balance sheet. These liabilities are due from
  AFI and were not incurred or guaranteed by the parent company, Fuelstream, Inc.
  NOTE 4 -LOSS CONTINGENCIES
  The Company is involved with various legal
  proceedings as described in Part II Item I of this Form 10-Q. The Company has evaluated these contingencies per the requirements
  of ASC 450-20 (previously SFAS 5, "Accounting for Contingencies") and determined that the likelihood of loss from these
  proceedings are remote.
  NOTE 5 -
  ACCOUNTS RECEIVABLE
  Accounts receivable at March 31, 2015
  and December 31, 2014 are as follow:
  March 31,
  2015
  December 31, 2014
  Accounts receivable
  $
  698,000
  $
  698,000
  698,000
  698,000
  Less: allowance on accounts receivable
  (670,000
  )
  (670,000
  )
  Accounts receivable, net
  $
  28,000
  28,000
  The Company is involved in disputes with
  $698,000 of the above accounts receivable and has filed a lawsuit.
  Table of Contents
  12
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  NOTE 6 -ACCOUNTS PAYABLE AND ACCRUED EXPENSES
  The accounts payable of $962,169, as of
  March 31, 2015, includes two parties who are seeking motion for entry for final garnishment judgment. The Company has assumed
  these two accounts payable with the acquisition of AFI (refer to note 3). Per court order interest is calculated at rate of
  6% per annum on $325,138 on one of the accounts payable and 18% on $192,061 (principal amount) of the second accounts
  payable. Accrued interest on accounts payable balance as of March 31, 2015 and December 31, 2014 is $196,628 and $183,108,
  respectively. Interest expense of $13,520 was charged to expenses during the three months ended March 31, 2015.
  NOTE 7 - NOTES PAYABLE
  Notes payable consisted of the following:
  March 31,
  2015
  December 31,
  2014
  Notes payable, issued on May 6, 2011, unsecured, interest at 10% per annum, due on demand.
  $
  59,500
  $
  59,500
  Notes payable, issued on August 25, 2010, unsecured, interest at 10% per annum due on demand.
  172,500
  172,500
  Notes payable issued on October 18, 2010 to individual, unsecured, interest at 15% per annum, due on demand(1)
  786,300
  786,300
  Notes payable issued on October 4, 2013, January 16, 2014, and January 22, 2014 to a company, unsecured, interest at 8% per annum, due on demand.
  8,000
  8,000
  Notes payable issued on March 5, 2013 to individual, unsecured, interest at 8% per annum, due on demand.
  7,500
  7,500
  Notes payable issued on July 1, 2013 to company, unsecured, interest at 8% per annum, due on demand
  810
  810
  Total notes payable
  1,034,610
  1,034,610
  Less: current portion
  (1,034,610
  )
  (1,034,610
  )
  Long-term notes payable
  $
  —
  $
  —
  Maturities of notes payable are as follows:
  Year Ending March 31,
  Amount
  2016
  $
  1,034,610
  Total
  $
  1,034,610
  Accrued interest on notes payable as of March
  31, 2015 was $541,688 and as of December 31, 2014 was $505,482. Interest expense of $36,440 has been charged to expenses for the
  three months ended March 31, 2015.
  1)
  This
                                           Note payable was assumed on the acquisition of AFI. The Company is negotiating a settlement
  agreement for $786,300, inclusive of all interest
                                           on the date of settlement.
  Table of Contents
  13
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  NOTE 8 -
  CONVERTIBLE DEBENTURE/NOTES PAYABLE
  March 31,
  2015
  December 31,
  2014
  Convertible note issued on February 20, 2014, unsecured, zero interest if paid on or before 90 days otherwise one time interest charge of 12%, due on February 20, 2016. Unamortized debt discount of $1,848 and $2,352, respectively.
  $
  2,272
  $
  1,768
  Convertible note issued on October 2013, unsecured, interest at 6%, due on October 13, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  9,912
  9,912
  Convertible note issued in January 2014, unsecured, interest
      at 8%, due on January 30, 2015. Unamortized debt discount of $-0- and $-0-, respectively.
  115,000
  115,000
  Convertible note issued on January 2, 2014, unsecured, interest at 10%, due on June 2, 2014 (in default), convertible into common stock at 60% of the bid price on the date of conversion. Unamortized debt discount of $-0- and $-0-, respectively.
  11,209
  11,209
  Convertible note issued on March 10, 2014, unsecured, interest at 10%, due on April 10, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  6,669
  6,669
  Convertible note issued on April 9, 2014, unsecured, interest at 10%, due on May 4, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  2,679
  2,679
  Convertible note issued on March 31, 2014, unsecured, interest at 8%, due on January 2, 2015. Unamortized debt discount of $-0- and $580, respectively.
  73,310
  72,730
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on September 1, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  93,000
  93,000
  Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  25,000
  25,000
  Convertible note issued on June 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $-0- and $-0-, respectively.
  25,000
  25,000
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $-0- and $-0-, respectively.
  25,000
  25,000
  Table of Contents
  14
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  Convertible note issued on May 16, 2014, unsecured, interest at 8%, due on November 16, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  1,975
  1,975
  Convertible note issued on June 30, 2014, unsecured, interest at 8%, due on December 30, 2014. Unamortized debt discount of $-0- and $-0-, respectively.
  1,929
  1,929
  Convertible note issued on July 9, 2014, unsecured, interest at 10%, due on February 9, 2015. Unamortized debt discount of $-0- and $827, respectively.
  4,556
  3,730
  Convertible note issued on August 29, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  1,890
  1,890
  Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $978, respectively.
  90,000
  89,022
  Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $978, respectively.
  90,000
  89,022
  Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $155, respectively.
  14,250
  14,095
  Convertible note issued on October 1, 2014, unsecured, interest at 12%, due on January 1, 2015 (in default). Unamortized debt discount of $-0- and $489, respectively.
  45,000
  44,511
  Convertible note issued on January 6, 2015, unsecured, interest at 8%, due on October 10, 2015. Unamortized debt discount of $4,181 and $-0-, respectively.
  1,819
  —
  Total notes payable
  640,470
  634,141
  Less: current portion
  (640,470
  )
  (634,141
  )
  Long-term convertible debenture/notes payable
  $
  —
  $
  —
  Convertible debenture February 20, 2014
  On February 20, 2014, the Company issued
  a $25,000 Convertible Promissory Note which bears interest at a rate of 12%, due on February 20, 2016 and is convertible into the
  Company's common stock at the holder's option, at the conversion rate of 60% of the lowest three day trading price
  for ten trading days immediately preceding the date of conversion. Any amount of principal or interest on this Note which is not
  paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is
  paid ("Default Interest") and the note also has prepayment penalty clause.
  Table of Contents
  15
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in February 2014. These embedded derivatives included
  certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
  the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
  of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair
  value of $39,722 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial
  Lattice Model based on the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  270.02
  %
  Risk free rate:
  0.34
  %
  The
  initial fair value of the embedded debt derivative of $39,722 was allocated as a debt discount up to the proceeds of the note
  ($25,000) with the remainder ($14,722) charged to current period operations as interest expense for the year ended December 31,
  2014. The outstanding balance as of March 31, 2015 is $2,272.
  Convertible debenture October 13, 2013:
  On October 13, 2013, the Company issued a
  $30,000 Convertible Promissory Note which bears interest at a rate of 6%, due on October 13, 2014 and is convertible into the Company's
  common stock at the holder's option, at the conversion rate of 60% of the lowest five prior trading days immediately preceding
  the date of conversion. Default rate of interest is 24% per annum.
  The Company received a net of $26,100 from
  the convertible note holder; $1,500 was paid towards the legal expenses and $2,400 toward third party fees.
  The Company identified embedded derivatives
  related to the Convertible Promissory Note entered into in October 2013. These embedded derivatives included certain conversion
  features. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives
  as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date.
  At the inception of the Convertible Promissory Note, the Company determined a fair value of $57,750 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
  277
  %
  Risk free rate:
  0.02
  %
  The initial fair value of the embedded debt derivative of
  $57,750 was allocated as a debt discount up to the proceeds of the note($30,000) with the remainder ($27,750) charged to
  current period operations as non-cash interest expense for the year ended December 31, 2013.
  During the year 2014 the Company issued 15,261,282 shares for
  of common stock to convert note amount of $20,087. The outstanding balance as of March 31, 2015 is $9,912.
  Convertible debenture December 2013 and
  January 2014
  During the year ended December 31, 2014,
  the Company issued two notes for a total of $228,500 Convertible Promissory Note which bears interest at a rate of 8%, due on July
  20, 2014 and January 30, 2015 and is convertible into the Company's common stock at the holder's option, at the conversion
  rate of 60% of the lowest three day trading price for ten trading days immediately preceding the date of conversion. Any amount
  of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per
  annum from the due date thereof until the same is paid ("Default Interest") and the note also has prepayment penalty
  clause.
  Table of Contents
  16
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in January 2014. These embedded derivatives included
  certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
  the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
  of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair
  value of $383,457 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial
  Lattice Model based on the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  267.19% - 268.98
  %
  Risk free rate:
  0.07% - 0.10
  %
  The
  initial fair value of the embedded debt derivative of $383,457 was allocated as a debt discount up to the proceeds of the note
  ($228,500) with the remainder ($154,957) charged to current period operations as interest expense for the year ended December
  31, 2014. The outstanding balance as of March 31, 2015 is $115,000.
  Convertible
  debenture January 2, 2014
  On January 2, 2014 the Company issued a $11,209
  Convertible Promissory Note which bears interest at a rate of 8%, due on June 2, 2014 and is convertible into the Company's
  common stock at the maker's option, at the conversion rate of 40% of the lowest three day trading price for ten trading days
  immediately preceding the date of conversion. Any amount of principal or interest on this Note which is not paid when due shall
  bear interest at the lesser of i) 10 percent (10%) per annum or ii) the maximum rate allowed under the applicable law until paid
  in full or until the Note is reinstated.
  The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $7,473 and was recorded as debt discount. The outstanding
  balance as of March 31, 2015 is $11,209.
  Convertible debentures March 10, 2014
  and April 9, 2014:
  During the year ended December 31, 2014,
  the Company issued Convertible notes of$6,669 and $2,679 for expenses incurred. The Convertible Promissory Notes which bears interest
  at a rate of 10%, due on April 10, 2014 and May 9, 2014 respectively,are 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 Debt discounts
  of $6,629 and $1,182 related to the Convertible Promissory Note issued on March 10, 2014 and April 9, 2014 respectively. The
  accounting treatment of debt discount financial instruments requires that the Company record the Debt discount on notes as of
  the inception date of the Convertible Promissory note and amortized it over the period of note. The Company has fully
  amortized $6,629 and $1,182 and charged to current period operations as interest expense for the year ended December 31,
  2014.
  The outstanding balance as of March 31, 2015
  is $6,669 and $2,679.
  Convertible debentures March 31, 2014:
  On March 31, 2014, the Company issued a
  $83,500 Convertible Promissory Note which bears interest at a rate of 8%, due on January 2, 2015 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.
  Table of Contents
  17
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The Company identified embedded
  derivatives related to the Convertible Promissory Note issued on March 31, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $157,749 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
  266.94
  %
  Risk free rate:
  0.10
  %
  The
  initial fair value of the embedded debt derivative of $157,749 was allocated as a debt discount up to the proceeds of the note
  ($83,500) with the remainder ($74,249) charged to current period operations as interest expense for the year ended December 31,
  2014.
  The
  outstanding balance as of March 31, 2015 is $73,310.
  Convertible debentures April 1, 2014:
  On April 1, 2014, the Company issued a
  $93,000 Convertible Promissory Note for expenses incurred. The note bears interest at a rate of 10%, due on September 9, 2014
  and is convertible into the Company's common stock at the holder's option, at the conversion rate of 75% 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 April 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $111,104 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
  266.94
  %
  Risk free rate:
  0.05
  %
  The initial fair value of the embedded debt
  derivative of $111,104 was allocated as a debt discount up to the proceeds of the note ($93,000) with the remainder ($18,104) charged
  to current period operations as interest expense for the year ended December 31, 2014.
  The outstanding balance as of March 31, 2015
  is $93,000.
  Convertible debentures April 1, 2014 June
  1, 2014 and June 4, 2014:
  During the year ended December 31,
  2014, the Company issued three convertible notes of$25,000 each, $50,000 for expenses incurred and $25,000 transfer of loan.
  One Convertible promissory note bears interest at 16% and the other two notes bears interest rate at 10%. The notes of
  $25,000 each which are due September 9, 2014 and December 1, 2014 are convertible into the Company's common stock at
  the holder's option at conversion price of $0.05, and the note of $25,000 which is due on demand is convertible at the
  conversion rate of 75% of the average of the lowest trading price for five trading days immediately preceding the date of
  conversion.
  Table of Contents
  18
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The Company identified Debt discount of
  $25,000 each related to the Convertible Promissory Note issued on April 1, 2014 and June 6, 2014. The accounting treatment of
  debt discount financial instruments requires that the Company record the Debt discount on note as of the inception date of
  the Convertible Promissory Note and amortized it over the period of note. The Company has fully amortized $50,000 and charged
  to current period operations as interest expense for the year ended December 31, 2014.
  The
  outstanding balance for these three convertible notes payable as of March 31, 2015 is $25,000 each.
  Convertible debentures May 16, 2014:
  On May 16, 2014, the Company issued a Convertible
  note of$1,975 for expenses incurred. The Convertible Promissory Note which bears interest at a rate of 8%, due on November 16,
  2014 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 Debt discount of
  $1,391 related to the Convertible Promissory Note issued on May 16, 2014. The accounting treatment of debt discount financial
  instruments requires that the Company record the Debt discount on notes as of the inception date of the Convertible
  Promissory note and amortized it over the period of note. The Company has fully amortized $1,391 and charged to current
  period operations as interest expense for the year ended December 31, 2014.
  The outstanding balance as of March 31, 2015
  is $1,975.
  Convertible debentures June 30, 2014:
  On June 30, 2014, the Company issued a Convertible
  note of$1,929 for expenses incurred. The Convertible Promissory Note which bears interest at a rate of 8%, due on December 30,
  2014 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 Debt discount of $1,417
  related to the Convertible Promissory Note issued on June 30, 2014. The accounting treatment of debt discount financial instruments
  requires that the Company record the Debt discount on notes as of the inception date of the Convertible Promissory note and amortized
  it over the period of note. The Company has fully amortized $1,417 and charged to current period operations as interest expense
  for the year ended December 31, 2014.
  The outstanding balance as of March 31, 2015
  is $1,929.
  Convertible debentures July 9, 2014:
  On July 9, 2014, the Company issued a
  Convertible note of$16,056 through transfer of convertible note, accrued interest and miscellaneous loans payable. The
  Convertible Promissory Note which bears interest at a rate of 10%, due on February 9, 2015 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 July 9, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $20,585 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial Lattice
  Model based on the following assumptions:
  Table of Contents
  19
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  Dividend yield:
  -0-
  %
  Volatility
  294.57
  %
  Risk free rate:
  0.07
  %
  The initial fair value of the embedded debt
  derivative of $20,585 was allocated as a debt discount up to the proceeds of the note ($16,056) with the remainder ($4,529) charged
  to current period operations as interest expense for the year ended December 31, 2014.
  The outstanding balance as of March 31, 2015
  is $4,556 after $11,500 converted to shares of common stock during the year ended December 31, 2014.
  Convertible debentures August 29, 2014:
  On August 29, 2014, the Company issued
  a Convertible note of $1,890 for expenses incurred. The Convertible Promissory Note which bears interest at a rate of 8%, due
  on December 30, 2014 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 August 29, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $3,150 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
  305.21
  %
  Risk free rate:
  0.03
  %
  The
  initial fair value of the embedded debt derivative of $3,150 was allocated as a debt discount up to the proceeds of the
  note ($1,890) with the remainder ($1,260) charged to current period operations as interest expense for the year ended December
  31, 2014.
  The outstanding balance as of March 31, 2015
  is $1,890.
  Convertible debentures October 1, 2014:
  On October 1, 2014, the Company issued a
  $90,000 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company's
  common stock at the holder's option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $150,000 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
  309.19
  %
  Risk free rate:
  0.02
  %
  Table of Contents
  20
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The
  initial fair value of the embedded debt derivative of $150,000 was allocated as a debt discount up to the proceeds of the note
  ($90,000) with the remainder ($60,000) charged to current period operations as interest expense for the year ended December 31,
  2014.
  The
  outstanding balance as of March 31, 2015 is $90,000.
  Convertible debentures October 1, 2014:
  On October 1, 2014, the Company issued a
  $90,000 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company's
  common stock at the holder's option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $150,000 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
  309.19
  %
  Risk free rate:
  0.02
  %
  Th
  e
  initial fair value of the embedded debt derivative of $150,000 was allocated as a debt discount up to the proceeds of the note
  ($90,000) with the remainder ($60,000) charged to current period operations as interest expense for the year ended December 31,
  2014.
  The outstanding balance as of March 31, 2015
  is $90,000.
  Convertible debentures October 1, 2014:
  On October 1, 2014, the Company issued a
  $14,250 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company's
  common stock at the holder's option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives
  included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company
  record the fair value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair
  value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a
  fair value of $23,750 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
  309.19
  %
  Risk free rate:
  0.02
  %
  The initial fair value of the embedded
  debt derivative of $23,750 was allocated as a debt discount up to the proceeds of the note ($14,250) with the remainder
  ($9,500) charged to current period operations as interest expense for the year ended December 31, 2014.
  Table of Contents
  21
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The outstanding balance as of March 31, 2015
  is $14,250.
  Convertible debentures October 1, 2014:
  On October 1, 2014, the Company issued a
  $45,000 Convertible Promissory Note which bears interest at a rate of 12%, due on January 1, 2015 and is convertible into the Company's
  common stock at the holder's option,at the conversion rate of 60% of the lowest 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 October 1, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair value
  of $75,000 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
  309.19
  %
  Risk free rate:
  0.02
  %
  The
  initial fair value of the embedded debt derivative of $75,000 was allocated as a debt discount up to the proceeds of the note
  ($45,000) with the remainder ($30,000) charged to current period operations as interest expense for the year ended December
  31, 2014.
  The
  outstanding balance as of March 31, 2015 is $45,000.
  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 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.
  The
  outstanding balance as of March 31, 2015 is $1,819.
  At March 31, 2015, the Company adjusted the recorded fair value
  of the derivative liability to market on the notes resulting in noncash, non-operating gain of $7,097 for the three months ended
  March 31, 2015.
  Table of Contents
  22
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  During the three months ended March 31, 2015
  and 2014 the Company amortized $36,330 and $335,021, respectively, of beneficial debt discount to the operations as interest expense.
  Accrued interest on convertible notes
  payable for the three months ended March 31, 2015 was $58,984. Interest expense of $15,103 has been charged to expenses for
  the three months ended March 31, 2015.
  NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED PARTIES
  Convertible Notes payable - related parties
  consist of the following
  March 31,
  2015
  December 31,
  2014
  Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.
  $
  1,710
  $
  1,710
  Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.
  42,470
  42,470
  Convertible note issued in January 2014, unsecured, interest at 10%, due on demand.
  45,000
  45,000
  Convertible note issued on April 3, 2014, unsecured, interest at 10%, due on demand.
  14,000
  14,000
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on demand.
  45,000
  45,000
  Convertible note issued on May 21, 2014, unsecured, interest at 10%, due on demand.
  4,000
  4,000
  Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000.
  30,542
  30,542
  Convertible note issued on July 1, 2014, unsecured, interest at 10%, due on demand.
  45,000
  45,000
  Convertible note issued on November 5, 2014, unsecured, interest at 10%, due on demand.
  4,000
  4,000
  Convertible note issued on November 5, 2014, unsecured, interest at 10%, due on demand.
  45,000
  45,000
  Convertible note issued on December 1, 2014, unsecured, interest at 10%, due on demand.
  4,000
  4,000
  Convertible note issued on January 1, 2015, unsecured, interest at 10%, due on demand.
  45,000
  —
  Total convertible notes payable - related parties
  325,722
  280,722
  Less: current portion
  (325,722
  )
  (280,722
  )
  Long-term convertible notes payable - related parties
  $
  —
  $
  —
  Table of Contents
  23
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  Convertible debenture October 1, 2013
  On October 1, 2013 the Company issued a $17,000
  Convertible Promissory Note against the accounts payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company's common stock at the holder's option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $15,692 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $15,692 was amortized.
  During the year 2014, the Company issued
  15,035,714 shares for the Conversion of note of $15,290. The outstanding balance as of March 31, 2015 is $1,710
  Convertible debenture October 1, 2013
  On October 1, 2013 the Company issued a $194,254
  Convertible Promissory Note against the account payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company's common stock at the holder's option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $179,312 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $179,312 was amortized.
  During the year 2014, the Company issued
  340,906,979 shares for the conversion of note of $151,784. The outstanding balance as of March 31, 2015 is $42,470.
  Table of Contents
  24
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  Convertible debenture January 1, 2014
  On January 1, 2014 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.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $45,000 and was recorded as debt discount. During the year ended December 31, 2014, debt discount
  of $45,000 was amortized. The outstanding balance as of March 31, 2015 is $45,000.
  Convertible debenture April 1, 2014
  On April 1, 2014 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.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $30,000 and was recorded as debt discount. During the year ended December 31, 2014, debt discount
  of $30,000 was amortized. The outstanding balance as of March 31, 2015 is $45,000.
  Convertible debenture April 3, 2014
  On April 3, 2014 the Company issued a $14,000
  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
  Table of Contents
  25
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  immediate steps required to get the appropriate
  level of approval from shareholders or the board of directors, where applicable to raise the number of authorized shares to satisfy
  the Notice of Conversion. In the event of default the Company has to pay 150% time the sum of outstanding principal and accrued
  interest. The note also has prepayment penalty clause.
  The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $9,333 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $9,333 was amortized. The outstanding balance as of March 31, 2015 is $14,000.
  Convertible debenture May 21, 2014
  On May 21, 2014 the Company issued a $4,000
  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.
  The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $4,000 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $4,000 was amortized. The outstanding balance as of March 31, 2015 is $4,000.
  Convertible debenture June 4, 2014
  On June 4, 2014 the Company issued a $50,000
  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.
  The Company identified embedded
  derivatives related to the Convertible Promissory Note issued on June 4, 2014. These embedded derivatives included certain
  conversion features. The accounting treatment of derivative financial instruments requires that the Company record the fair
  value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of
  each subsequent balance sheet date. At the inception of the Convertible Promissory
  Table of Contents
  26
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  Note, the Company determined a fair value
  of $46,875 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
  290.02
  %
  Risk free rate:
  0.00
  %
  The initial fair value of the embedded
  debt derivative of $46,875 was allocated as a debt discount for the year ended December 31, 2014. During the year ended
  December 31, 2014, debt discount of $46,875 was amortized.
  During the year 2014, the Company issued
  19,458,498 shares for the conversion of note of $19,458. The outstanding balance as of March 31, 2015 is $30,542.
  Convertible debenture July 1, 2014
  On July 1, 2014 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.
  The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $30,000 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $30,000 was amortized. The outstanding balance as of December 31, 2014 is
  $45,000.
  Convertible debenture November 5, 2014
  On November 5, 2014 the Company issued a
  $4,000 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.
  Table of Contents
  27
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $2,667 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $2,667 was amortized. The outstanding balance as of March 31, 2015 is $4,000.
  Convertible debenture November 5, 2014
  On November 5, 2014 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.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $30,000 and was recorded as debt discount. During the year ended December 31, 2014, debt discount
  of $30,000 was amortized. The outstanding balance as of March 31, 2015 is $45,000.
  Convertible debenture December 1, 2014
  On December 1, 2014 the Company issued a
  $4,000 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.
  The Company analyzed the convertible
  debts for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that
  derivative accounting is not applicable. The Company further analyzed the convertible debts for a beneficial conversion
  feature under ASC 470-20 on the date of the notes and determined that a beneficial conversion feature exists. The intrinsic
  value of the beneficial conversion feature was determined to be $2,667 and was recorded as debt discount. During the year
  ended December 31, 2014, debt discount of $2,667 was amortized. The outstanding balance as of March 31, 2015 is $4,000.
  Table of Contents
  28
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  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.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $30,000 and was recorded as debt discount. During the three months ended March 31, 2015, debt discount
  of $30,000 was amortized. The outstanding balance as of March 31, 2015 is $45,000.
  For the three months ended March 31, 2015 and 2014, interest
  expenses charged on the above notes is $8,471 and $6,306, respectively. Accrued interest on convertible notes payable –
  related parties as of March 31, 2015 and December 31, 2014 was $47,404 and $38,933, respectively.
  Table of Contents
  29
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  NOTE 10 - NOTES PAYABLE - RELATED PARTIES
  Notes payable - related parties consist of the following:
  March 31,
  2015
  December 31,
  2014
  Note payable to a related individual, secured by tangible and intangible assets of the Company, interest at 16% per annum, principal and interest due April 1, 2000, past due.  Note is convertible into common stock of the Company at $0.10 per share. Note is in default. (2)
  $
  1,080,973
  $
  1,080,973
  Note payable to a related individual, interest at 8% per annum,past due. Note is in default. (1)
  1,000,000
  1,000,000
  Notes payable to related individuals, unsecured, interest at 10%,due on demand. (3)
  28,500
  28,500
  Notes payable to related individual, unsecured, interest at 12%,due on demand. (4)
  28,633
  28,633
  Total notes payable - related parties
  2,138,106
  2,138,106
  Less: current portion
  (2,138,106
  )
  (2,138,106
  )
  Long-term notes payable - related parties
  $
  —
  $
  —
  Maturities of notes payable - related parties are as follows:
  Year Ending March 31,
  Amount
  2016
  $
  2,138,106
  Total
  $
  2,138,106
  Accrued interest on notes payable
  – related parties as of March 31, 2015 and December 31, 2014 was $444,003 and $380,080, respectively. During the three
  months ended March 31, 2015, total interest expense to related party was $63,923.
  1)
  This note was issued for the acquisition
  of AFI on January 28, 2012. As of March 31, 2015 and December 31, 2014, the Company had accrued interest on the note in the amount
  of $253,589 and $233,863, respectively.
  2)
  This note was originally issued for $450,000.
  During the year ended December 31, 2013, the principle value of $450,000 along with accrued interest of $837,369 was converted
  to two new notes for $1,087,370 and $200,000. During the year 2013 the Company issued 2,100,000 shares of the common stock against
  settlement of the new note of $200,000. In the year 2014, the Company issued 3,500,000 shares of common stock for Note value of
  $35,000 and accrued interest of $6,650. The Balance note along with the balance accrued interest of $130,603 was transferred to
  another note holder for $1,080,973. The accrued interest as of December 31, 2014 is $177,024.
  3)
  During the year ended December 31, 2013,
  one of the note holder for $15,000 along with accrued interest of $13,300 transferred its loan to a non- related party. During
  the year 2013 the Company issued 1,800,000 shares of the common stock to settle$28,300 of note of non- related party.. Accrued
  interest as of March 31, 2015 was $11,288.
  Table of Contents
  30
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  4)
  During the year 2014, the Company issued
  the note value of $26,000 in cash and $2,632 for expense incurred. Accrued interest as of March 31, 2015 was $2,102.
  NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS
  ASC 820 defines fair value as the price that
  would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
  measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the
  asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs
  can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on
  the observability of those inputs.
  The following tables set forth by level within
  the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of March
  31, 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 March 31, 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 March 31, 2015 on a recurring basis:
  Assets and liabilities at fair value on a
  recurring basis at March 31, 2015:
  Level 1
  Level 2
  Level 3
  Total
  Liabilities
  Derivative liability
  —
  —
  $
  377,362
  $
  377,362
  Total
  —
  —
  $
  377,362
  $
  377,362
  The following table provides a summary of
  changes in fair value of the Company's Level 3 financial liabilities as of March 31, 2015:
  Debt Derivative
  Liability
  Balance, December 31, 2014
  $
  372,939
  Initial fair value of debt derivatives at note issuances
  11,520
  Extinguished derivative liability
  —
  Mark-to-market at March 31, 2015 - Embedded debt derivatives
  (7,097
  )
  Balance, March 31, 2015
  $
  377,362
  Net gain for the period included in earnings relating to the liabilities held at March 31, 2015
  $
  7,097
  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.
  Table of Contents
  31
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  Preferred Stock
  The Company is authorized to
  issue 200 preferred shares of $0.0001 par value. As of March 31, 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 March 31, 2015 and December 31, 2014 the Company had
  1,166,978 and 969,086 shares of common stock as issued and outstanding.
  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 197,892 shares issued. These financial statements have been retroactively restated for this change
  in capital structure.
  NOTE 13 - OPTIONS
  The Company has adopted FASB ASC 718, "Share-Based
  Payments" ("ASC 718") to account for its stock options. The Company estimates the fair value of each stock award
  at the grant date by using the Black-Scholes option pricing model. The assumptions used to calculate the fair value of options
  granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized
  only for those options expect to vest, with forfeitures estimated at the date of grant based on our historical experience and future
  expectations.
  The following table summarizes the changes
  in options outstanding issued to employees of the Company:
  Number of Shares
  Weighted Average Exercise Price
  Outstanding as of January 1, 2015
  370,000
  $
  1.34
  Granted
  —
  —
  Exercised
  —
  —
  Cancelled
  —
  —
  Outstanding at March 31, 2015
  370,000
  $
  1.34
  Table of Contents
  32
  FUELSTREAM INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  March 31, 2015
  Common stock options outstanding and exercisable
  as of March 31, 2015 are:
  Options Outstanding
  Options Exercisable
  Expiration
  Date
  Exercise Price
  Number shares outstanding
  Weighted Average Contractual Life (Years)
  Number Exercisable
  Weighted Average Exercise Price
  October  1, 2018
  $
  0.01
  70,000
  4.00
  66,644
  $
  0.01
  January 2, 2019
  1.65
  300,000
  4.25
  237,124
  1.65
  Total
  370,000
  303,768
  During the year ended December 31, 2013,
  the Company granted 300,000 stock options with an exercise price of $1.65 out of which 75,000 were immediately vested and balance
  vesting over three years and expiring six years from issuance date.
  The fair value of the vested portion of $34,028
  was charged to expenses and additional paid in capital during the three months ended March 31, 2015.
  The fair value of these stock options granted
  and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:
  Significant assumptions:
  Risk-free interest rate at grant date
  1.04%-0.89
  %
  Expected stock price volatility
  199.38%-344.22
  %
  Expected dividend payout
  —
  Expected option life-years
  6
  NOTE 14 – SUBSEQUENT EVENTS
  On April 20, 2015, Fuelstream, Inc. (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) one (1) year 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.
  Table of Contents
  33
  ITEM 2. MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  The following
  discussion of the financial condition and results of operations of Fuelstream, Inc. (hereafter, "Fuelstream," the
  "Company," "we," "our," or "us") should be read in conjunction with the
  Unaudited Financial Statements and related Notes thereto included herein. This discussion may contain forward-looking
  statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
  1934, including, without limitation, statements regarding the Company's expectations, beliefs, intentions, or future
  strategies that are signified by the words "expects," "anticipates," "intends,"
  "believes," or similar language. Actual results could differ materially from those projected in the forward looking
  statements. Prospective investors should carefully consider the information set forth herein, and the Company cautions
  investors that its business and financial performance is subject to substantial risks and uncertainties.
  Overview
  We are an in-wing
  and on-location supplier and distributor of aviation fuel to corporate, commercial, military, and privately-owned aircraft
  throughout the world. We also provide a variety of ground services either directly or through our affiliates, including
  concierge services, passenger and baggage handling, landing rights, coordination with local aviation authorities, aircraft
  maintenance services, catering, cabin cleaning, customs approvals, and third-party invoice reconciliation. Our personnel
  assist customers in flight planning and aircraft routing aircraft, obtaining permits, arranging overflies, and flight follow
  services.
  Our core business has
  developed as a result of a joint venture and eventual acquisition of Aviation Fuel International, Inc., now a wholly-owned subsidiary
  of the Company ("AFI"). The Company's principal sources of revenues are expected to result from the gross selling
  price of fuel delivery contracts and associated services. Expenses which comprise the costs of goods sold are expected to include
  the acquisition price of fuel transported, as well as operational and staffing costs of the trucks and other vehicles used for
  delivery. General and administrative expenses have been comprised of administrative wages and benefits; occupancy and office expenses;
  outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. Selling
  and marketing expenses include selling/marketing wages and benefits; advertising and promotional expenses; travel and other miscellaneous
  related expenses.
  On June 21, 2012
  the Company entered into an agreement to create a fuel logistics joint venture with South African based Global Airways
  ("Global"). Global is an international air transport organization whose activities cover acquisition,
  refurbishment, heavy maintenance, leasing and chartering of air crafts throughout South Africa. We expect that this
  transaction will expand the Company's international footprint in a market that is developing standardized systems to
  meet the aviation fueling needs of commercial and cargo carriers.
  The partnership with
  Global underlines the company's strategic plan to generate new revenue streams by partnering with aircraft leasing and MRO businesses
  and includes the development, operation and management of the fuel storage, supply and logistic operations located in South Africa.
  It is anticipated that the partnership will oversee the logistics delivery of up to 3 Million gallons of Jet-A Fuel per month by
  the end of 2013 if the Company is able to secure sufficient means of financing the purchase of such fuel.
  Our ability to generate
  revenues during the year 2015 and beyond depends substantially upon the Company's resources available in order to develop
  and grow the business of AFI as a supplier of fuel and logistics. Such efforts require significant systems development, marketing
  and personnel costs, which, in turn, require substantial funding. If we are unable to obtain such funding, its ability to generate
  revenues will be significantly impaired and we may be unable to continue operations.
  Table of Contents
  34
  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 month periods ended March 31, 2015 and 2014.
  Revenues.
  The
  Company generated net revenues of $-0- during the three months ended March 31, 2015 as compared to $47,414 for the three
  months ended March 31, 2014. In the future, the Company's sole source of revenue is expected to be related to fuel
  delivery contracts and associated services.
  Cost of
  Sales.
  Our cost of sales for the three months ended March 31, 2015 was $-0- as compared to $36,338 for the three months
  ended March 31, 2014. Our cost of sales consisted principally of the acquisition price of fuel and other petro chemicals
  delivered to customers and clients, other related services provided directly or outsourced through our affiliates, as well as
  operational and staffing costs with respect thereto. The increase is a direct correlation to the increase in sales as
  described above.
  Selling,
  General and Administrative Expenses.
  Selling, general and administrative expenses for the three months ended March 31,
  2015 were $118,310 compared to $450,133 during the three months ended March 31, 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 fuel brokerage business.
  Other
  Income (Expense)
  . The Company had net other expenses of $172,286 for the three months ended March 31, 2015 compared to
  $490,595 during the three months ended March 31, 2014. Other expenses incurred were comprised primarily of interest expenses
  related to notes payable including amortization of debt discount and setoff with gain on change in derivative liability and a
  gain on the conversion of debt. During the three months ended March 31, 2015 and 2014, interest expense was $179,383 and
  $728,975, respectively. Included in interest expense was the amortization of debt discount of $36,330 and $380,021 for the
  three months ended March 31, 2015 and 2014, respectively. The gain on change in derivative liability was $7,097 and $238,380
  for the three months ended March 31, 2015 and 2014, respectively.
  Net
  Loss
  . The Company had a net loss of $290,596 for the three months ended March 31, 2015 compared to $929,652 during the
  three months ended March 31, 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 March 31, 2015,
  our primary source of liquidity consisted of $152 in cash and cash equivalents. We hold most of our cash reserves in local checking
  accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and
  long-term loans, and through the private placement of our common stock.
  We have sustained significant
  net losses which have resulted in a total stockholders' deficit at March 31, 2015 of $6,885,803 and are currently experiencing
  a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. We anticipate
  a net loss for the year ended December 31, 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.
  Table of Contents
  35
  There is presently no
  agreement in place with any source of financing for the Company and we cannot assure you that the Company will be able to raise
  any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will
  likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect the Company and its business,
  and may cause us to cease operations. Consequently, shareholders could incur a loss of their entire investment in the Company.
  Off-Balance
  Sheet Arrangements
  We
  do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
  condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
  resources that is material to investors.
  Contractual
  Obligations
  As
  a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this
  information.
  Critical accounting policies
  The preparation of financial statements in
  conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities,
  the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods.
  The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We
  also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to
  understanding our results, which are described in Note 4 to our audited consolidated financial statements for 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.
  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.
  Table of Contents
  36
  As of March 31, 2015,
  the end of our first quarter, we carried out an evaluation, under the supervision of our Chief Executive Officer and Controller,
  of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded
  that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report. Our
  board of directors has only one member. We do not have a formal audit committee.
  Changes in Internal Control over Financial
  Reporting
  There have been no
  significant changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 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 AFI. AFI filed under the commercial lien
  laws as required to secure a lien on the planes fueled in order to protect their receivable due from Ryan. Disagreements between
  the parties resulted in both parties filing separate lawsuits in three actions. Ryan filed a cause of action in Case No. 09-57580,
  Ryan International Airlines, Inc. v. Aviation Flight Services, LLC ("AFS") and Aviation Fuel International, Inc.,
  ("AFI")
  , and sought recovery of $1,491,308.66 allegedly paid to AFS as pre-payment of aviation fuel and flight
  services under a contractual relationship between Ryan and AFS. AFI moved to dismiss the action, to which, Ryan has subsequently
  filed a notice of removal to the Federal District Court for the Northern District of Illinois, Bankruptcy Division Case No.: 12-80802.
  AFI filed an action for breach of contract for Ryan's failure to pay certain Jet Fuel invoices for the delivery of fuel in
  the amount of $678,000 plus interest;
  Aviation Fuel International v. Ryan International Airlines, Inc., a Kansas corporation,
  Wells Fargo Bank Northwest, Trustee N.A., a Utah corporation, RUBLOFF 757-MSN24794LLC, an Illinois limited liability company, RYAN
  767 LLC, an Illinois limited liability company, AFT TRUST SUB I, a Delaware corporation, RYAN 767 N123 LLC, an Illinois limited
  liability company, and RUBLOFF 440 LLC, an Illinois corporation
  , Civil Action Case No. CACE 10-037788-04. AFI also filed the
  corresponding claims of liens under the FAA Aircraft Registration Branch, for each plane, registered and tail wing number listed
  therein. This action has also been recently noticed for been removal to the Federal District Court for the Northern District of
  Illinois, Bankruptcy Division Case No.: 12-80802. In addition, as a result of Ryan's filing a Federal Involuntary Bankruptcy
  Petition against Aviation Flight Services ("AFS") on June 10, 2010, Case No.: 10-27313-JKO, (S.D. of Fla.), our subsidiary
  AFI, also filed and was discharged as a creditor in the amount of $269,000. However, the obligations for the unpaid fuelings owed
  to AFI still remain outstanding as obligations due to AFI.
  Southern Sky Air Tours,
  d/b/a Myrtle Beach Direct Air and Tours (Direct Air)
  . On or about March 13, 2012, Southern Sky Air Tours, d/b/a Myrtle Beach
  Direct Air and Tours ("Direct Air") ― a public charter operator ― ceased operations. Direct Air has subsequently
  filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts (Worcester)(Case no. 12-40944).
  The Company currently has $122,000 in cash in escrow with Suntrust Bank, representing a partial payment by Direct Air for Fuel.
  This action is currently pending before the court, as it relates to the collection of the garnishment.
  Table of Contents
  37
  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 197,892 shares issued. These financial statements have been retroactively
  restated for this change in capital structure.
  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.
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  38
  ITEM
  4. MINE SAFETY DISCLOSURES
  Not applicable.
  ITEM
  5. OTHER INFORMATION
  Not applicable.
  Table of Contents
  39
  ITEM 6.	EXHIBITS
  The following
  documents are filed as exhibits to this Form 10-Q:
  INDEX TO EXHIBITS
  Number
  Exhibits
  3.1
  Amended and Restated Certificate of Incorporation of Fuelstream, Inc
  3.2
  Amended and Restated Bylaws of Fuelstream, Inc.(1)
  10.1
  Form of Indemnification Agreement (2)
  10.2
  2012 Equity Incentive Plan (2)
  31
  Certification by Chief Executive Officer, John D. Thomas, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  .
  32
  Certification by Chief Executive Officer, John D. Thomas, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  .
  (1) Filed as an Exhibit to the Company's
  Current Report on Form 8-K, filed on June 17, 2011.
  (2) Filed as an Exhibit to the Company's
  Current Report on Form 8-K, filed on September 18, 2012.
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  40
  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:
      June 19, 2015
  BY:
  /s/ John D. Thomas
  __________________
  John D. Thomas
  Chief Executive Officer
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  41