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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">UNITED
      STATES</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECURITIES
      AND EXCHANGE COMMISSION</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
      D.C. 20549</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FORM
      8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CURRENT
      REPORT PURSUANT</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TO
      SECTION 13 OR 15(d) OF THE</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SECURITIES
      EXCHANGE ACT OF 1934</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
      report (Date of earliest event reported): </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>September
      15, 2006</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FBO
      AIR,
      INC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div>
        <hr style="COLOR: black" align="center" noshade size="1" width="40%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      Name of Registrant as Specified in Its Charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nevada</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div>
        <hr style="COLOR: black" align="center" noshade size="1" width="35%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
      or
      Other Jurisdiction of Incorporation)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="top" width="28%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">333-56046</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">87-0617649</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
                File Number)</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
                Employer Identification No.)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="28%">&#160;</td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">101
                Hangar Road</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Wilkes-Barre/Scranton
                International Airport</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="28%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Avoca,
                PA</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18641</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
                of Principal Executive Offices)</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
                Code)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(570)
      414-1400</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <hr style="COLOR: black" align="center" noshade size="1" width="35%">
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant&#8217;s
      Telephone Number, Including Area Code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>see</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      General
      Instruction A.2 below):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font>&#160;&#160;Written
      communications
      pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2"><font style="FONT-FAMILY: Wingdings">o</font>&#160;&#160;</font><a name="Check2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-FAMILY: Wingdings">o</font>&#160;&#160;Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-d(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font>&#160;&#160;Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">1</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INFORMATION
      TO BE INCLUDED IN THE REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Section
      3 - Securities and Trading Markets</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      3.02.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Unregistered
      Sales of Equity Securities.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Compensation Committee of the Board of Directors of FBO Air, Inc., the
      registrant (&#8220;FBO Air&#8221;), granted an option effective September 15, 2006 to
      purchase 250,000 shares of the Common Stock, $.001 par value (the &#8220;Common
      Stock&#8221;), of FBO Air. The Compensation Committee acted pursuant to a unanimous
      consent dated August 25, 2006 providing that the option was not to become
      effective unless and until the optionee&#8217;s employment with FBO Air
      commenced.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      was
      no underwriter for the grant. An incentive stock option expiring September
      14,
      2011 to purchase 250,000 shares of the Common Stock was granted pursuant to
      the
      FBO Air, Inc. Stock Option Plan of 2005 (the &#8220;Option Plan&#8221;) to Keith P. Bleier
      who became FBO Air&#8217;s Chief Financial Officer and a Senior Vice President of FBO
      Air effective on that date. See Item 5.02(c)(1) of this Report for information
      relating to such election and designation. The employment agreement of such
      executive officer requires that he be granted an option to purchase 250,000
      shares of the Common Stock on the effective date of employment and then on
      each
      of the anniversary dates during the two remaining years of the initial term.
      See
      Item 5.02(c)(3) for a brief description of certain of the other material terms
      and conditions of his employment agreement. A copy of the employment agreement
      is filed as Exhibit 10.1 to this Report and is incorporated into this Item
      3.02
      and Item 5.02(c)(3) by this reference. A copy of the Option Plan is filed (by
      incorporation by reference) as Exhibit 10.2 to this Report and is incorporated
      in this Item 3.02 by this reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      option was not issued for cash and there were no underwriting discounts or
      commissions. As indicated in subsection (b) above, this option was issued in
      consideration of the services to be performed for FBO Air and its subsidiaries
      (FBO Air and its subsidiaries collectively the &#8220;Company&#8221;) by this executive
      officer of FBO Air.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FBO
      Air
      claims that the grant of this option was exempt from the registration
      requirement of Section 5 of the Securities Act of 1933, as amended (the
&#8220;Securities Act&#8221;), pursuant to the exemption of Section 4(2) of the Securities
      Act as a transaction not involving a public offering. The optionee represented
      to FBO Air that he was acquiring the option, and, if not registered under the
      Securities Act at the time, the shares of the Common Stock issuable upon the
      exercise of the option, for investment, and not with a view toward, or in
      connection with, a distribution (as the term &#8220;distribution&#8221; is contemplated
      under the Securities Act).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      option is exercisable at $.60 per share, which is above the market price on
      September 15, 2006, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>i.e.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      the
      date of grant. The option is not exercisable until September 15, 2007 and
      thereafter is exercisable, from time to time in its entirety or in part, until
      September 14, 2011.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div><br>
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      <div id="FTR">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Section
      5 - Corporate Governance and Management</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      5.02</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Departure
      of Directors or Principal Officers; Election of Directors; Appointment of
      Principal Officers.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      September 15, 2006, Keith P. Bleier began to serve FBO Air as a Senior Vice
      President and its Chief Financial Officer. The Board of Directors elected and
      designated Mr. Bleier pursuant to a unanimous consent dated August 25, 2006
      providing that such election and designation were not to become effective unless
      and until he commenced his employment (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>i.e.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      on
      September 15, 2006).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
      Bleier is FBO Air&#8217;s first full-time Chief Financial Officer. Ronald J.
      Ricciardi, the President and Chief Executive Officer of FBO Air, had been
      serving as Acting Chief Financial Officer until now, assisted by a financial
      consultant. As a result, the Company&#8217;s ability to provide for segregation of
      duties and the ability to ensure consistently complete and accurate financial
      reporting was impaired, making the Company&#8217;s disclosure controls and procedures
      not effective. With the engagement of Mr. Bleier, the FBO Air Board of Directors
      believes that a major step has been taken toward curing this material weakness
      and that the duties can now begin to be appropriately segregated. The directors
      recognize, however, that as the Company grows and its resources permit,
      additional financial personnel may have to be added to supplement Mr. Bleier&#8217;s
      efforts.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prior
      to
      his engagement by FBO Air and commencing in September 2002, Mr. Bleier, who
      is a
      certified public accountant, served as a Principal of the Business Advisory
      Group of Bonadio &amp; Co. LLP, a certified public accounting firm. While
      serving in such capacity, among his duties was as the engagement manager in
      that
      firm&#8217;s representation of Airborne, Inc., which became a subsidiary of FBO Air on
      September 23, 2005. From September 1998 to September 2002, he served as the
      principal accounting and financial officer of Montana Mills Bread Co., Inc.
      and
      its subsidiaries, which company&#8217;s common stock was listed on the American Stock
      Exchange prior to its purchase by Krispy Kreme Donut Corp. and which was a
      specialty retail and wholesale bakery manufacturer. He has no family
      relationship with any director or executive officer of FBO Air. During the
      past
      two years, except as reported in the second preceding sentence, Mr. Bleier
      has
      had no transactions or proposed transactions to which FBO Air was, or was to
      be,
      a party requiring disclosure pursuant to Item 404 of Regulation S-B of the
      Securities and Exchange Commission.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
      Bleier entered into an employment agreement dated as of September 1, 2006 with
      FBO Air providing for (a) a three-year initial term commencing September 15,
      2006, subject to automatic renewals for additional one-year periods unless
      terminated by either party on 90 days&#8217; prior notice to the other before the
      renewal anniversary date; (b) a base salary of $185,000, which amount shall
      increase by 5% on each anniversary date during the term of this agreement,
      with
      eligibility for an incentive bonus each year during the term at the discretion
      of the Board of Directors; (c) a grant of an option, on the effective date
      of
      his employment and then on each of the anniversary dates during the initial
      term, to purchase 250,000 shares of the Common Stock, each option to become
      exercisable on the first anniversary of its respective date of grant and to
      expire five years from its respective date of grant (see Item 3.02 of this
      Report for information as to the first option grant); and (d) severance pay
      of
      one year&#8217;s base salary, his prior year's incentive bonus&#160;and immediate
      vesting of options in the event of a change of control (which is defined in
      a
      manner similar to the provision in other executive officers&#8217; employment
      agreements) if his employment terminates within one year of the change of
      control.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      September 15, 2006, the Board of Directors of FBO Air amended its Bylaws to
      increase the number of authorized directors from eight to eleven and elected
      Donald Hecht, Thomas Iovino and Stephen B. Siegel to fill three of the four
      vacancies. The Board acted pursuant to a unanimous consent dated August 25,
      2006
      providing that each of the elections was not to become effective until the
      later
      of (i) September 15, 2006 or (ii) five business days after (A) the closing
      of
      the then pending FBO Air private placement (which closed on September 1, 2006)
      and (B) his acceptance of such election. This was a second step by the Board
      in
      its attempt to ensure that at least a majority of the directors were independent
      (five of the ten will now qualify as independent). Each newly elected director
      will now serve until the next Annual Meeting of Stockholders (now expected
      to be
      called for early November 2006) and until his successor is duly elected and
      qualified.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      are
      no arrangements or understandings between any of the new directors and any
      other
      person pursuant to which such director was selected as a director.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
      assignment of the new directors to committees of the Board of Directors has
      been
      made as yet. It is expected, however, that because of Mr. Hecht&#8217;s accounting
      background that he will be assigned to the Audit Committee.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
      for the newly-elected director&#8217;s participation on the same basis as other
      investors in the private placement which FBO Air closed on September 1, 2006,
      there have been no transactions or proposed transactions during the past two
      years between such director and FBO Air or any of its subsidiaries required
      to
      be reported pursuant to Item 404(a) of Regulation S-B of the Securities and
      Exchange Commission.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Section
      9 - Financial Statements and Exhibits</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      9.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
      Statements and Exhibits</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
                Statements of Business Acquired.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pro
                Forma Financial Information.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
                No.</font></div>
            </td>
            <td align="left" valign="top" width="5%">&#160;</td>
            <td align="left" valign="top" width="85%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
            <td align="left" valign="top" width="5%">&#160;</td>
            <td align="left" valign="top" width="85%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td align="left" valign="top" width="5%">&#160;</td>
            <td align="left" valign="top" width="85%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Copy
                of Employment Agreement dated as of September 1, 2006 by and between
                FBO
                Air and Keith P. Bleier.</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
            <td align="left" valign="top" width="5%">&#160;</td>
            <td align="left" valign="top" width="85%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td align="left" valign="top" width="5%">&#160;</td>
            <td align="left" valign="top" width="85%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Copy
                of FBO Air, Inc. Stock Option Plan of 2005.
                (1)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 144pt; TEXT-INDENT: -108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt; border-bottom: black thin solid;">&#160;</td>
            <td style="width: 36pt; border-bottom: black thin solid;">&#160;</td>
            <td style="width: 36pt; border-bottom: black thin solid;">&#160;</td>
            <td style="width: 36pt; border-bottom: black thin solid;">&#160;</td>
            <td style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                by reference to FBO Air&#8217;s Annual Report on Form 10-KSB for the fiscal year
                ended December 31, 2005.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Signatures</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      caused this Report to be signed on its behalf by the undersigned hereunto duly
      authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="40%">&#160;</td>
            <td align="left" valign="top" width="40%">
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                Air, Inc.</font></div>
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            <td align="left" valign="top" width="40%">&#160;</td>
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          <tr>
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                /s/ Ronald J. Ricciardi</font></div>
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                J. Ricciardi</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="40%">&#160;</td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FBO
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      Current Report on Form 8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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            <td align="left" valign="top" width="62%">&#160;</td>
            <td width="3%">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description</font></div>
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            <td width="3%">&#160;</td>
            <td align="left" valign="top" width="62%">&#160;</td>
            <td width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
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            <td align="left" valign="top" width="62%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Copy
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            <td width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
          </tr>
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            <td align="left" valign="top" width="10%">&#160;</td>
            <td width="3%">&#160;</td>
            <td align="left" valign="top" width="62%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">September
                1, 2006 by and between FBO Air and </font></div>
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          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
            <td width="3%">&#160;</td>
            <td align="left" valign="top" width="62%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Keith
                B. Bleier</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">E-2</font></div>
            </td>
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{"company-data": {"conformed-name": "FBO AIR, INC.", "cik": "0001128281", "assigned-sic": "4581", "irs-number": "870617649", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "333-56046", "film-number": "061102536"}, "business-address": {"street1": "101 HANGAR ROAD", "street2": "WILKES-BARRE/SCRANTON INTERN'T'L AIRPORT", "city": "AVOCA", "state": "PA", "zip": "18641", "phone": "570.414.1400"}, "mail-address": {"street1": "101 HANGAR ROAD", "street2": "WILKES-BARRE/SCRANTON INTERN'T'L AIRPORT", "city": "AVOCA", "state": "PA", "zip": "18641"}, "former-company": {"former-conformed-name": "SHADOWS BEND DEVELOPMENT INC", "date-changed": "20010220"}}
Unassociated Document
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT PURSUANT
TO
      SECTION 13 OR 15(d) OF THE
SECURITIES
      EXCHANGE ACT OF 1934
Date
      of
      report (Date of earliest event reported):
September
      15, 2006
FBO
      AIR,
      INC.
(Exact
      Name of Registrant as Specified in Its Charter)
Nevada
(State
      or
      Other Jurisdiction of Incorporation)
333-56046
87-0617649
(Commission
                File Number)
(I.R.S.
                Employer Identification No.)
101
                Hangar Road
Wilkes-Barre/Scranton
                International Airport
Avoca,
                PA
18641
(Address
                of Principal Executive Offices)
(Zip
                Code)
(570)
      414-1400
(Registrant's
      Telephone Number, Including Area Code)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (
see
General
      Instruction A.2 below):
o
Written
      communications
      pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
o
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-d(b))
o
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
1
INFORMATION
      TO BE INCLUDED IN THE REPORT
Section
      3 - Securities and Trading Markets
Item
      3.02.
Unregistered
      Sales of Equity Securities.
(a)
The
      Compensation Committee of the Board of Directors of FBO Air, Inc., the
      registrant ("FBO Air"), granted an option effective September 15, 2006 to
      purchase 250,000 shares of the Common Stock, $.001 par value (the "Common
      Stock"), of FBO Air. The Compensation Committee acted pursuant to a unanimous
      consent dated August 25, 2006 providing that the option was not to become
      effective unless and until the optionee's employment with FBO Air
      commenced.
(b)
There
      was
      no underwriter for the grant. An incentive stock option expiring September
      14,
      2011 to purchase 250,000 shares of the Common Stock was granted pursuant to
      the
      FBO Air, Inc. Stock Option Plan of 2005 (the "Option Plan") to Keith P. Bleier
      who became FBO Air's Chief Financial Officer and a Senior Vice President of FBO
      Air effective on that date. See Item 5.02(c)(1) of this Report for information
      relating to such election and designation. The employment agreement of such
      executive officer requires that he be granted an option to purchase 250,000
      shares of the Common Stock on the effective date of employment and then on
      each
      of the anniversary dates during the two remaining years of the initial term.
      See
      Item 5.02(c)(3) for a brief description of certain of the other material terms
      and conditions of his employment agreement. A copy of the employment agreement
      is filed as Exhibit 10.1 to this Report and is incorporated into this Item
      3.02
      and Item 5.02(c)(3) by this reference. A copy of the Option Plan is filed (by
      incorporation by reference) as Exhibit 10.2 to this Report and is incorporated
      in this Item 3.02 by this reference.
(c)
The
      option was not issued for cash and there were no underwriting discounts or
      commissions. As indicated in subsection (b) above, this option was issued in
      consideration of the services to be performed for FBO Air and its subsidiaries
      (FBO Air and its subsidiaries collectively the "Company") by this executive
      officer of FBO Air.
(d)
FBO
      Air
      claims that the grant of this option was exempt from the registration
      requirement of Section 5 of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to the exemption of Section 4(2) of the Securities
      Act as a transaction not involving a public offering. The optionee represented
      to FBO Air that he was acquiring the option, and, if not registered under the
      Securities Act at the time, the shares of the Common Stock issuable upon the
      exercise of the option, for investment, and not with a view toward, or in
      connection with, a distribution (as the term "distribution" is contemplated
      under the Securities Act).
(e)
The
      option is exercisable at $.60 per share, which is above the market price on
      September 15, 2006,
i.e.
,
      the
      date of grant. The option is not exercisable until September 15, 2007 and
      thereafter is exercisable, from time to time in its entirety or in part, until
      September 14, 2011.
(f)
Not
      applicable.
2
Section
      5 - Corporate Governance and Management
Item
      5.02
Departure
      of Directors or Principal Officers; Election of Directors; Appointment of
      Principal Officers.
(a)
Not
      applicable.
(b)
Not
      applicable.
(c)
(1)
Effective
      September 15, 2006, Keith P. Bleier began to serve FBO Air as a Senior Vice
      President and its Chief Financial Officer. The Board of Directors elected and
      designated Mr. Bleier pursuant to a unanimous consent dated August 25, 2006
      providing that such election and designation were not to become effective unless
      and until he commenced his employment (
i.e.
,
      on
      September 15, 2006).
Mr.
      Bleier is FBO Air's first full-time Chief Financial Officer. Ronald J.
      Ricciardi, the President and Chief Executive Officer of FBO Air, had been
      serving as Acting Chief Financial Officer until now, assisted by a financial
      consultant. As a result, the Company's ability to provide for segregation of
      duties and the ability to ensure consistently complete and accurate financial
      reporting was impaired, making the Company's disclosure controls and procedures
      not effective. With the engagement of Mr. Bleier, the FBO Air Board of Directors
      believes that a major step has been taken toward curing this material weakness
      and that the duties can now begin to be appropriately segregated. The directors
      recognize, however, that as the Company grows and its resources permit,
      additional financial personnel may have to be added to supplement Mr. Bleier's
      efforts.
(2)
Prior
      to
      his engagement by FBO Air and commencing in September 2002, Mr. Bleier, who
      is a
      certified public accountant, served as a Principal of the Business Advisory
      Group of Bonadio & Co. LLP, a certified public accounting firm. While
      serving in such capacity, among his duties was as the engagement manager in
      that
      firm's representation of Airborne, Inc., which became a subsidiary of FBO Air on
      September 23, 2005. From September 1998 to September 2002, he served as the
      principal accounting and financial officer of Montana Mills Bread Co., Inc.
      and
      its subsidiaries, which company's common stock was listed on the American Stock
      Exchange prior to its purchase by Krispy Kreme Donut Corp. and which was a
      specialty retail and wholesale bakery manufacturer. He has no family
      relationship with any director or executive officer of FBO Air. During the
      past
      two years, except as reported in the second preceding sentence, Mr. Bleier
      has
      had no transactions or proposed transactions to which FBO Air was, or was to
      be,
      a party requiring disclosure pursuant to Item 404 of Regulation S-B of the
      Securities and Exchange Commission.
3
(3)
Mr.
      Bleier entered into an employment agreement dated as of September 1, 2006 with
      FBO Air providing for (a) a three-year initial term commencing September 15,
      2006, subject to automatic renewals for additional one-year periods unless
      terminated by either party on 90 days' prior notice to the other before the
      renewal anniversary date; (b) a base salary of $185,000, which amount shall
      increase by 5% on each anniversary date during the term of this agreement,
      with
      eligibility for an incentive bonus each year during the term at the discretion
      of the Board of Directors; (c) a grant of an option, on the effective date
      of
      his employment and then on each of the anniversary dates during the initial
      term, to purchase 250,000 shares of the Common Stock, each option to become
      exercisable on the first anniversary of its respective date of grant and to
      expire five years from its respective date of grant (see Item 3.02 of this
      Report for information as to the first option grant); and (d) severance pay
      of
      one year's base salary, his prior year's incentive bonus and immediate
      vesting of options in the event of a change of control (which is defined in
      a
      manner similar to the provision in other executive officers' employment
      agreements) if his employment terminates within one year of the change of
      control.
(d)
(1)
Effective
      September 15, 2006, the Board of Directors of FBO Air amended its Bylaws to
      increase the number of authorized directors from eight to eleven and elected
      Donald Hecht, Thomas Iovino and Stephen B. Siegel to fill three of the four
      vacancies. The Board acted pursuant to a unanimous consent dated August 25,
      2006
      providing that each of the elections was not to become effective until the
      later
      of (i) September 15, 2006 or (ii) five business days after (A) the closing
      of
      the then pending FBO Air private placement (which closed on September 1, 2006)
      and (B) his acceptance of such election. This was a second step by the Board
      in
      its attempt to ensure that at least a majority of the directors were independent
      (five of the ten will now qualify as independent). Each newly elected director
      will now serve until the next Annual Meeting of Stockholders (now expected
      to be
      called for early November 2006) and until his successor is duly elected and
      qualified.
(2)
There
      are
      no arrangements or understandings between any of the new directors and any
      other
      person pursuant to which such director was selected as a director.
(3)
No
      assignment of the new directors to committees of the Board of Directors has
      been
      made as yet. It is expected, however, that because of Mr. Hecht's accounting
      background that he will be assigned to the Audit Committee.
(4)
Except
      for the newly-elected director's participation on the same basis as other
      investors in the private placement which FBO Air closed on September 1, 2006,
      there have been no transactions or proposed transactions during the past two
      years between such director and FBO Air or any of its subsidiaries required
      to
      be reported pursuant to Item 404(a) of Regulation S-B of the Securities and
      Exchange Commission.
Section
      9 - Financial Statements and Exhibits
Item
      9.01
Financial
      Statements and Exhibits
(a)
Financial
                Statements of Business Acquired.
Not
      applicable.
(b)
Pro
                Forma Financial Information.
Not
      applicable.
4
(c)
Exhibits
Exhibit
                No.
Description
10.1
Copy
                of Employment Agreement dated as of September 1, 2006 by and between
                FBO
                Air and Keith P. Bleier.
10.2
Copy
                of FBO Air, Inc. Stock Option Plan of 2005.
                (1)
(1)
Incorporated
                by reference to FBO Air's Annual Report on Form 10-KSB for the fiscal year
                ended December 31, 2005.
Signatures
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      caused this Report to be signed on its behalf by the undersigned hereunto duly
      authorized.
FBO
                Air, Inc.
(Registrant)
Dated:
                September 19, 2006
By
                /s/ Ronald J. Ricciardi
Ronald
                J. Ricciardi
President
                and Chief Executive Officer
5
FBO
      Air,
      Inc.
Index
      to
      Exhibits Filed
With
      Current Report on Form 8-K
Exhibit
Number
Description
Page
10.1
Copy
                of Employment Agreement dated as of
September
                1, 2006 by and between FBO Air and
Keith
                B. Bleier
E-2
E-1