UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q/A

Amendment
No. 1



(Mark
One)



[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the quarterly period endedMARCH 31, 2016



[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the transition period from ___________ to _________.



Commission
file number 000-25753



NUSTATE
ENERGY HOLDINGS, INC.

(Exact
name of registrant as specified in its charter)



|Florida                      |  | 87-0449667                           
|---------------------------- |  | -------------------------------------
|(State
    of Incorporation) |  | (IRS
    Employer Identification No.)



401
E. LAS OLAS BOULEVARD, SUITE 1400

FORT
LAUDERDALE, FL 33301

(Address
of principal executive offices) (Zip Code)



Registrant’s
telephone number, including area code: (954) 712-7487



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

Yes
[X] No [  ]



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 [  ]
No [X]



Indicate
by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.



|Large
    accelerated filer [  ]                | Accelerated
    filer [  ]       
|----------------------------------------------- | ---------------------------------
|Non-accelerated
    filer [  ]                  | Smaller
    reporting company [X]
|(Do
    not check if smaller reporting company) |                                  



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No
[X]



The
number of shares outstanding of the registrant’s Common Stock, $0.0001 par value per share, as of May 13, 2016, was 7,717,954,802.



When
used in this quarterly report, the terms “Nustate,” “the Company,” ” we,” “our,”
and “us” refer to NuState Energy Holdings, Inc., a Nevada corporation.






















EXPLANATORY
NOTE



This
Amendment No. 1 to Form 10-Q/A (this “Amendment”) amends the Quarterly Report on Form 10-Q of NuState Energy Holdings,
Inc. (the “Company”) for the quarter ended March 31, 2016, originally filed with the Securities and Exchange Commission
on May 16, 2016 (the “Original Filing”). This Amendment is being filed solely to include revised Exhibits31.1 and
31.2, which replace the previously filed versions of those exhibits, to include certain statements required by Regulation S-K inadvertently
omitted when previously filed.



Except
as described as above, no changes have been made to the Original Filing. The Original Filing continues to speak as of the date
of the Original Filing, and the Company has not updated the disclosures contained therein to reflect any events that have occurred
as of a date subsequent to the date of the Original Filing. Accordingly, this Amendment should be read in conjunction with the
Original Filing and the Company’s filings made with the SEC subsequent to the filing of the Original Filing. The filing
of this Amendment is not an admission that the Original Filing, when filed, included any untrue statement of a material fact or
omitted to state a material fact necessary to make a statement not misleading.
















CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION



This
quarterly report on Form 10-Q contains certain forward-looking statements. Forward-looking statements may include our statements
regarding our goals, beliefs, strategies, objectives, plans, including product and service developments, future financial conditions,
results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such
as “may,” “will,” “should,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “predict,” “potential” or “continue,” the negative
of such terms, or other comparable terminology. These statements are subject to known and unknown risks, uncertainties, assumptions
and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements.
These factors include, but are not limited to, our ability to implement our strategic initiatives, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors.
Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas
of risk described in connection with any forward-looking statements that may be made herein. The business and operations of NuState
Energy Holdings, Inc. are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements
contained in this report. Except as required by law, we undertake no obligation to release publicly the result of any revision
to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Further information on potential factors that could affect our business is described under
“Item 1A. Risk Factors” in our registration statement on Form 10 as filed with the Securities and Exchange Commission,
or the SEC, on May 8, 2013. Readers are also urged to carefully review and consider the various disclosures we have made in this
report and in our registration statement on Form 10.



2







NUSTATE
ENERGY HOLDINGS, INC.



INDEX



|PART
    I - FINANCIAL INFORMATION                                                             | 4 
|---------------------------------------------------------------------------------------------- | --
|Item
    1. Financial Statements                                                               | 4 
|Balance
    Sheets – March 31, 2016 (unaudited) and June 30, 2015                              | 4 
|Statements
    of Operations - Three and Nine Months ended March 31, 2016 and 2015 (unaudited) | 5 
|Statements
    of Cash Flows - Three and Nine Months Ended March 31, 2016 and 2015 (unaudited) | 6 
|Notes
    to Financial Statements (unaudited)                                                  | 7 
|Item
    2. Management’s Discussion and Analysis and Results of Operations                     | 17
|Item
    3. Quantitative and Qualitative Disclosures About Market Risk                         | 21
|Item
    4. Controls and Procedures                                                            | 21
|PART
    II - OTHER INFORMATION                                                                | 21
|Item
    1. Legal Proceedings.                                                                 | 22
|Item
    1A. Risk Factors.                                                                     | 22
|Item
    2. Unregistered Sales of Equity Securities and Use of Proceeds.                       | 22
|Item
    3. Defaults Upon Senior Securities.                                                   | 22
|Item
    4. Mine Safety Disclosures.                                                           | 22
|Item
    5. Other Information.                                                                 | 22
|Item
    6. Exhibits                                                                           | 22
|SIGNATURES                                                                                     | 23



3







PART
I - FINANCIAL INFORMATION



Item
1. Financial Statements



NuState
Energy Holdings, Inc.

BALANCE
SHEETS



|                                                                                                                                                                                                           |  | March 31, 2016 |             |   | June
    30, 2015 (1) |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | --------------------- | -
|                                                                                                                                                                                                           |  | (Unaudited)    |             |   |                       |  
|ASSETS                                                                                                                                                                                                     |  |                |             |   |                       |  
|Current assets:                                                                                                                                                                                            |  |                |             |   |                       |  
|Cash                                                                                                                                                                                                       |  | $              | 12,090      |   |                       | $
|                                                                                                                                                                                                           |  |                |             |   |                       |  
|Total current assets                                                                                                                                                                                       |  |                | 12,090      |   |                       |  
|                                                                                                                                                                                                           |  |                |             |   |                       |  
|Total assets                                                                                                                                                                                               |  | $              | 12,090      |   |                       | $
|                                                                                                                                                                                                           |  |                |             |   |                       |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                      |  |                |             |   |                       |  
|                                                                                                                                                                                                           |  |                |             |   |                       |  
|Current liabilities:                                                                                                                                                                                       |  |                |             |   |                       |  
|Accounts payable and accrued expenses                                                                                                                                                                      |  | $              | 552,858     |   |                       | $
|Accrued compensation                                                                                                                                                                                       |  |                | 133,825     |   |                       |  
|Accrued interest                                                                                                                                                                                           |  |                | 1,166,002   |   |                       |  
|Settlement due to ASC Recap LLC                                                                                                                                                                            |  |                | -           |   |                       |  
|Convertible notes payable to ASC Recap LLC                                                                                                                                                                 |  |                | 150,000     |   |                       |  
|Convertible notes payable                                                                                                                                                                                  |  |                | 1,554,349   |   |                       |  
|Notes payable                                                                                                                                                                                              |  |                | 215,241     |   |                       |  
|Derivative liabilities                                                                                                                                                                                     |  |                | 270,798     |   |                       |  
|Total current liabilities                                                                                                                                                                                  |  |                | 4,043,073   |   |                       |  
|                                                                                                                                                                                                           |  |                |             |   |                       |  
|Stockholders’ deficit:                                                                                                                                                                                     |  |                |             |   |                       |  
|Preferred stock, $0.001 par value, 100,000,000 shares authorized                                                                                                                                           |  |                |             |   |                       |  
|Series A (20,000,000 shares designated, 13,992,340 shares issued and outstanding as of March
    31, 2016 and 0 shares issued and outstanding at June 30, 2015)                                            |  |                | 13,992      |   |                       |  
|Series B (30,000,000 shares designated, 1,328,040 shares issued and outstanding as of March 31,
    2016 and 149,600 shares issued and outstanding at June 30, 2015)                                       |  |                | 1,328       |   |                       |  
|Series C ( no shares designated or issued and outstanding as of March 31, 2016 and 20,000 designated
    and 332 shares issued and outstanding as of June 30, 2015)                                        |  |                | -           |   |                       |  
|Series D (no shares designated or issued and outstanding as of March 31, 2016 and 40 shares designated
    and 19 shares issued and outstanding as of June 30, 2015)                                       |  |                | -           |   |                       |  
|Series E (no shares designated or issued and outstanding as of March 31, 2016 and 1,600 designated
    with no shares issued or outstanding June 30, 2015)                                                 |  |                | -           |   |                       |  
|Series F (no shares designated or issued and outstanding at March 31, 2016 and 500 shares designated
    and 128 shares issued and outstanding as of June 30, 2015)                                        |  |                | -           |   |                       |  
|Series G (no shares designated or issued and outstanding as of March 31, 2016 and 6 shares designated
    with no shares issued or outstanding June 30, 2015)                                              |  |                | -           |   |                       |  
|Series H (no shares designated or issued and outstanding at March 31, 2016 and 1,600 shares designated
    with 70 shares issued and outstanding as of June 30, 2015)                                      |  |                | -           |   |                       |  
|Series I (no shares designated or issued and outstanding as of March 31, 2016 and 100,000 shares
    designated with 30,000 shares issued and outstanding as of June 30, 2015)                             |  |                | -           |   |                       |  
|Series J (no shares designated or issued and outstanding as of March 31, 2016 and 80 shares designated
    with 2 shares issued and outstanding as of June 30, 2015)                                       |  |                | -           |   |                       |  
|Series Y (no shares designated or issued and outstanding as of March 31, 2016 and 87,000 shares
    designated with 87,000 shares issued and outstanding as of June 30, 2015)                              |  |                | -           |   |                       |  
|Common stock, $0.0001 par value, 20,000,000,000 shares authorized: 7,675,954,802 shares and 2,176,954,802
    shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively (See Note 7) |  |                | 767,595     |   |                       |  
|Additional paid in capital                                                                                                                                                                                 |  |                | 36,124,272  |   |                       |  
|Accumulated deficit                                                                                                                                                                                        |  |                | (40,938,171 | ) |                       |  
|Total stockholders’ deficit                                                                                                                                                                                |  |                | (4,030,983  | ) |                       |  
|                                                                                                                                                                                                           |  |                |             |   |                       |  
|Total liabilities and stockholders’ deficit                                                                                                                                                                |  | $              | 12,090      |   |                       | $



(1)
Derived from audited financial statements



See
Notes to Unaudited Financial Statements.



4







NuState
Energy Holdings, Inc.

STATEMENTS
OF OPERATIONS

(Unaudited)



|                                                       |  | Three Months Ended |                |   | Nine Months Ended |  
|------------------------------------------------------ |  | ------------------ | -------------- | - | ----------------- | -
|                                                       |  | March 31,          |                |   | March 31,         |  
|                                                       |  | 2016               |                |   | 2015              |  
|                                                       |  |                    |                |   |                   |  
|Net revenues                                           |  | $                  | -              |   |                   | $
|                                                       |  |                    |                |   |                   |  
|Operating expenses:                                    |  |                    |                |   |                   |  
|Selling, general and administrative                    |  |                    | 174,366        |   |                   |  
|Total Operating Expenses                               |  |                    | 174,366        |   |                   |  
|                                                       |  |                    |                |   |                   |  
|Loss from Operations                                   |  |                    | (174,366       | ) |                   |  
|                                                       |  |                    |                |   |                   |  
|Other income (expenses):                               |  |                    |                |   |                   |  
|Gain on change in fair value of derivative liabilities |  |                    | 3,254          |   |                   |  
|Interest expense                                       |  |                    | (64,713        | ) |                   |  
|Gain (loss) on extinguishment of debt                  |  |                    | 1,216,805      |   |                   |  
|Loss on debt settlement                                |  |                    | -              |   |                   |  
|Total other income (expenses)                          |  |                    | 1,155,346      |   |                   |  
|                                                       |  |                    |                |   |                   |  
|Net income (loss)                                      |  | $                  | 980,980        |   |                   | $
|                                                       |  |                    |                |   |                   |  
|Income (loss) per common share basic                   |  | $                  | -              |   |                   | $
|                                                       |  |                    |                |   |                   |  
|Income (loss) per common share - diluted               |  | $                  | -              |   |                   | $
|                                                       |  |                    |                |   |                   |  
|Weighted average common shares outstanding - basic     |  |                    | 7,675,954,802  |   |                   |  
|                                                       |  |                    |                |   |                   |  
|Weighted average common shares outstanding diluted     |  |                    | 15,968,522,404 |   |                   |  



See
Notes to Unaudited Financial Statements.



5







NuState
Energy Holdings, Inc.

STATEMENTS
OF CASH FLOWS

(Unaudited)



|                                                                            |  | Nine-month period ended |           
|--------------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                            |  | March 31,               |           
|                                                                            |  | 2016                    |           
|Cash flows from operating activities:                                       |  |                         |           
|Net income (loss)                                                           |  | $                       | 1,236,667 
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                         |           
|(Gain) loss on extinguishment of debt                                       |  |                         | (2,030,395
|Loss on debt settlement                                                     |  |                         | 12,135    
|Gain on change in fair value of derivative liabilities                      |  |                         | (25,010   
|Stock-based compensation                                                    |  |                         | 49,900    
|Amortization of debt discount                                               |  |                         | -         
|Changes in operating assets and liabilities:                                |  |                         |           
|Accounts payable                                                            |  |                         | (11,378   
|Accrued interest                                                            |  |                         | 230,969   
|Accrued compensation                                                        |  |                         | 203,073   
|Net cash used in operating activities                                       |  |                         | (334,040  
|                                                                            |  |                         |           
|Cash flows from financing activities:                                       |  |                         |           
|Proceeds from issuance of convertible notes payable                         |  |                         | 260,000   
|Repayment of notes payable                                                  |  |                         | (5,000    
|Proceeds from sale of preferred stock                                       |  |                         | 85,000    
|                                                                            |  |                         |           
|Net cash provided by financing activities                                   |  |                         | 340,000   
|                                                                            |  |                         |           
|Net increase in cash                                                        |  |                         | 5,960     
|                                                                            |  |                         |           
|Cash, beginning of period                                                   |  |                         | 6,130     
|                                                                            |  |                         |           
|Cash, end of period                                                         |  | $                       | 12,090    
|                                                                            |  |                         |           
|Supplemental disclosures of cash flow information:                          |  |                         |           
|Cash paid for interest                                                      |  | $                       | -         
|Cash paid for income taxes                                                  |  | $                       | -         
|                                                                            |  |                         |           
|Non-cash investing and financing activities:                                |  |                         |           
|                                                                            |  |                         |           
|ASC debt returned in exchange for accrued compensation                      |  | $                       | 702,895   
|ASC debt returned in exchange for accrued interest payable                  |  | $                       | 689,218   
|ASC debt returned in exchange for accounts payable                          |  | $                       | 90,360    
|ASC debt returned in exchange for convertible notes payable                 |  | $                       | 677,146   
|ASC debt returned in exchange for short term notes payable                  |  | $                       | 225,000   
|Convertible debt exchanged for preferred stock                              |  | $                       | 799,527   
|Short term note payable exchanged for preferred stock                       |  | $                       | 100,000   
|Accrued interest payable exchanged for preferred stock                      |  | $                       | 532,647   
|Accrued compensation exchanged for preferred and common stock               |  | $                       | 1,045,000 



See
Notes to Unaudited Financial Statements.



6







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
1: ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND BASIS OF PRESENTATION



NuState
Energy Holdings, Inc., orthe Company, currently is a Florida corporation that was incorporated in Nevada in October
1987. It was formerly known as Jaguar Investments, Inc. between October 1987 and May 2003, Power2Ship, Inc. between May 2003 and
November 2006, and Fittipaldi Logistics, Inc. between November 2006 and December 2007.



The
accompanying financial statements have been prepared on a going concern basis. The Company had no revenues and had net cash used
in operating activities of $334,040 during the nine months ended March 31, 2016 and had a working capital deficit of approximately
$4.0 million at March 31, 2016. These matters raise substantial doubt about the Company’s
ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its
ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations
when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans
to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome
of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient
funds to execute its business plan or generate positive operating results. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.



Basis
of Presentation



The
unaudited interim financial information furnished herein reflects all adjustments, consisting only of normal recurring items,
which in the opinion of management are necessary to fairly state NuState Energy Holdings, Inc.’s (the “Company”
or “we”, “us” or “our”) financial position, results of operations and cash flows for the dates
and periods presented and to make such information not misleading. Certain information and footnote disclosures normally included
in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America
have been omitted pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”), nevertheless,
management of the Company believes that the disclosures herein are adequate to make the information presented not misleading.



These
unaudited financial statements should be read in conjunction with the Company’s audited financial statements for the year
ended June 30, 2015, contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 11, 2016. The results
of operations for the nine months ended March 31, 2016, are not necessarily indicative of results to be expected for any other
interim period or the fiscal year ending June 30, 2016.



NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Use
of Estimates



The
preparation of 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 reporting amounts of revenues and expenses
during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions used
in Black-Scholes valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.



Cash
and Cash Equivalents



The
Company considers all highly liquid, temporary, cash equivalents with an original maturity of three months or less when purchased,
to be cash equivalents. The Company had no cash equivalents during the nine months ended March 31, 2016 and 2015.



Concentration
of Credit Risks



The
Company is subject to a concentration of credit risk from cash.



The
Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or
FDIC, up to $250,000. During the nine months ended March 31, 2016 and 2015, the Company had not reached a bank balance exceeding
the FDIC insurance limit.



Derivative
Liabilities



The
Company assessed the classification of its derivative financial instruments as of March 31, 2016 and 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.



7







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued



During
the nine months ended March 31, 2016 and 2015, the Company had notes payable outstanding in which the conversion rate was variable
and undeterminable. Accordingly, the Company has recognized a derivative liability in connection with such instruments. The Company
uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter
and in determining which valuation method is most appropriate for the instrument (e.g., Black-Scholes-Merton), the expected volatility,
the implied risk free interest rate, as well as the expected dividend rate, if any.



Fair
Value of Financial Instruments



The
Company accounts, for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair
Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing
generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring
fair value, and expands disclosure about such fair value measurements.



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. Additionally, ASC 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:



|Level
    1: | Observable
    inputs such as quoted market prices in active markets for identical assets or liabilities.                            
|------------ | -------------------------------------------------------------------------------------------------------------------------------------
|             |                                                                                                                                      
|Level
    2: | Observable
    market-based inputs or unobservable inputs that are corroborated by market data.                                      
|             |                                                                                                                                      
|Level
    3: | Unobservable
    inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.



The
Company’s derivative liability at March 31, 2016 and 2015 is classified as a Level 3 financial instrument.



Additional
Disclosures Regarding Fair Value Measurements



The
carrying value of cash, accounts payable and accrued expenses, accrued compensation, notes and convertible promissory notes payable
approximate their fair value due to the short maturity of these items.



Convertible
Instruments



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 ASC 470-20, Debt with Conversion and Other Options. 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 deemed dividends for the intrinsic value of conversion
options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment
date of the note transaction and the effective conversion price embedded in the note.



ASC
815-40, Contracts in Entity’s own Equity, generally provides that, among other things, if an event is not within the entity’s
control, such contract could require net cash settlement and shall be classified as an asset or a liability.



The
Company determines whether the instruments issued in the transactions are considered indexed to the Company’s own stock.
During the fiscal year 2014 the Company issued convertible securities with variable conversion provisions that resulted in derivative
liabilities.



Income
Taxes



The
Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires,
among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires
the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between
the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred
tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.



The
Company follows the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions”. When tax returns are
filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others
are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.
In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the
period during which, based on all available evidence, management believes it is more likely than not that the position will be
sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset
or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the
largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing
authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above
should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest
and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all
highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.



8







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued



Income
Taxes, continued



The
Company has adopted ASC 740-10-25,“Definition of Settlement”, which provides guidance on how an entity
should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits
and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without
being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax
benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical
merits and the statute of limitations remains open. As of March 31, 2016, the Company had not filed tax returns for the tax years
ending June 30, 2008 through 2015 and such returns, when filed, potentially will be subject to audit by the taxing authorities
for a minimum of three years beyond the filing date under the three-year statute of limitations. The Company has not accrued any
potential tax penalties associated with not filing these tax returns. Due to recurring losses, management believes such potential
tax penalties, in any, would not be material in amount.



Share-Based
Payment



The
Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under
the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the
fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the
vesting period.



The
Company has elected to use the Black-Scholes-Merton, or BSM, option-pricing model to estimate the fair value of its options, which
incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to
calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards
ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant
and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.



Segment
Reporting



The
Company operates in one segment, which is to search for possible acquisition targets and merge with an operating company. The
Company’s chief operating decision-maker evaluates the performance of the Company based upon expenses by functional areas
as disclosed in the Company’s statements of operations.



Recent
Accounting Pronouncements



Recent
accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company.



As
an emerging growth company, we have elected to use the exemption provided for in the Jumpstart Our Business Startups Act or JOBS
Act allowing us to delay the adoption of new or revised accounting standards that have different effective dates for public and
private companies until those standards apply to private companies pursuant to Section 102(b)(1) of the Act.



9







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued



Basic
and Diluted Earnings Per Share



Basic
earnings per share are calculated by dividing income available to stockholders by the weighted-average number of shares of Common
Stock outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares of Common
Stock and dilutive Common Stock share equivalents outstanding during the period. Dilutive Common Stock share equivalents consist
of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method). Potential
common shares includable in the computation of fully-diluted per-share results are not presented in the financial statements as
their affect would be anti-dilutive.



|                                                                                                        |  | For the Three Months ended
    March 31, |                |   | For the Nine Months Ended
    March 31, |  
|------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | -------------- | - | --------------------------------------- | -
|                                                                                                        |  | 2016                                     |                |   | 2015                                    |  
|Numerator:                                                                                              |  |                                          |                |   |                                         |  
|Loss from operations                                                                                    |  | $                                        | (174,366       | ) |                                         | $
|Interest expense                                                                                        |  |                                          | (64,713        | ) |                                         |  
|Loss on debt settlement                                                                                 |  |                                          | 0              |   |                                         |  
|Gain on change in fair value of derivative liabilities                                                  |  |                                          | 3,254          |   |                                         |  
|Gain (loss) on extinguishment of debt                                                                   |  |                                          | 1,216,805      |   |                                         |  
|Numerator for basic earnings per share- net loss                                                        |  | $                                        | 980,980        |   |                                         | $
|                                                                                                        |  |                                          |                |   |                                         |  
|Denominator:                                                                                            |  |                                          |                |   |                                         |  
|Denominator for basic earnings per share-weighted average shares                                        |  |                                          | 7,675,954,802  |   |                                         |  
|Effect of dilutive securities-when applicable:                                                          |  |                                          |                |   |                                         |  
|Convertible promissory notes                                                                            |  |                                          | 8,271,887,062  |   |                                         |  
|Preferred Stock                                                                                         |  |                                          | 20,680,540     |   |                                         |  
|Warrants                                                                                                |  |                                          | -              |   |                                         |  
|Denominator for diluted earnings per share—adjusted weighted-average
    shares and assumed conversions |  |                                          | 15,968,522,404 |   |                                         |  
|Earnings (loss) per share:                                                                              |  |                                          |                |   |                                         |  
|Basic                                                                                                   |  |                                          |                |   |                                         |  
|Net earnings (loss) per share-basic                                                                     |  | $                                        | -              |   |                                         | $
|Diluted                                                                                                 |  |                                          |                |   |                                         |  
|Net earnings (loss) per share-diluted                                                                   |  | $                                        | -              |   |                                         | $



10







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued



Basic
and Diluted Earnings Per Share



The
weighted-average potentially dilutive common share equivalents outstanding at March 31, 2016 and 2015 are as follows:



|                          |  | 2016 |               |  | 2015 | 
|------------------------- |  | ---- | ------------- |  | ---- | 
|Series A Preferred Stock  |  |      | 13,992,340    |  |      | 
|Series B Preferred Stock  |  |      | 6,688,200     |  |      | 
|Series C Preferred Stock  |  |      | -             |  |      | 
|Series D Preferred Stock  |  |      | -             |  |      | 
|Series F Preferred Stock  |  |      | -             |  |      | 
|Series H Preferred Stock  |  |      | -             |  |      | 
|Series I Preferred Stock  |  |      | -             |  |      | 
|Series J Preferred Stock  |  |      | -             |  |      | 
|Series Y Preferred Stock  |  |      | -             |  |      | 
|Convertible notes payable |  |      | 8,271,887,062 |  |      | 
|Warrants                  |  |      | -             |  |      | 
|Total                     |  |      | 8,292,567,602 |  |      | 



NOTE
3: DERIVATIVE LIABILITY



The
Company accounts for the embedded conversion features included in its convertible instruments as derivative liabilities. The aggregate
fair value of derivative liabilities at March 31, 2016 and June 30, 2015 amounted to $270,798 and $295,808, respectively. For
the nine months ended March 31, 2016 and 2015, the Company recorded a gain related to the change in fair value of the derivative
liability amounting to $25,010 and $64,830, respectively. At each measurement date, the fair value of the embedded conversion
features was based on the Black-Scholes-Merton method using the following assumptions:



|                         |  | Nine
    Months Ended March 31, |                                                  
|------------------------ |  | ------------------------------- | -------------------------------------------------
|                         |  | 2016                            |                                                  
|Effective Exercise price |  | $                               | 0.00005                                          
|Effective Market price   |  | $                               | 0.0001                                           
|Volatility               |  |                                 | 295                                              
|Risk-free interest       |  |                                 | 0.1                                              
|Terms                    |  |                                 | 365
                                         days
|Expected dividend rate   |  |                                 | 0                                                



Changes
in the derivative liabilities during the nine months ended March 31, 2016 and 2015 are as follows:



|Derivative liability at June 30, 2015                                                |  | $ | 295,808 |  
|------------------------------------------------------------------------------------ |  | - | ------- | -
|Gain on change in fair value of derivative liability, recognized as other
    income |  |   | (25,010 | )
|Derivative liability at March 31, 2016                                               |  | $ | 270,798 |  



|Derivative liability at June 30, 2014                                                |  | $ | 356,289 |  
|------------------------------------------------------------------------------------ |  | - | ------- | -
|Gain on change in fair value of derivative liability, recognized as other
    income |  |   | (64,830 | )
|Derivative liability at March 31, 2015                                               |  | $ | 291,459 |  



NOTE
4: ACCRUED INTEREST PAYABLE



Changes
in accrued interest payable during the nine months ended March 31, 2016 and 2015 are as follows:



|Accrued interest payable at June 30, 2015                  |  | $ | 778,462   |  
|---------------------------------------------------------- |  | - | --------- | -
|Return of accrued interest from liability due to ASC Recap |  |   | 689,218   |  
|Interest expense for the nine months ended March 31, 2016  |  |   | 230,969   |  
|Accrued interest exchanged for preferred stock             |  |   | (532,647  | )
|Accrued interest payable at March 31, 2016                 |  | $ | 1,166,002 |  



|Accrued interest payable at June 30, 2014                                                                         |  | $ | 729,853  |  
|----------------------------------------------------------------------------------------------------------------- |  | - | -------- | -
|Reduction of accrued interest related to restructured notes payable                                               |  |   | (156,091 | )
|Interest expense for the nine months ended March 31, 2015, excluding amortization
    of debt discount of $79,623 |  |   | 156,045  |  
|Accrued interest payable at March 31, 2015                                                                        |  | $ | 729,807  |  



11







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
5: CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE



Convertible
Notes Payable



At
March 31, 2016 and June 30, 2015 convertible debentures consisted of the following:



|                                       |  | March
    31, 2016 |           |  | June 30, 2015 |  
|-------------------------------------- |  | ------------------ | --------- |  | ------------- | -
|Convertible notes payable              |  | $                  | 1,554,349 |  |               | $
|Convertible notes payable to ASC Recap |  |                    | 150,000   |  |               |  
|Unamortized debt discount              |  |                    | -         |  |               |  
|Total                                  |  | $                  | 1,704,349 |  |               | $



The
Company had convertible promissory notes aggregating approximately $1.7 million and $1.6 million at March 31, 2016 and June 30,
2015, respectively. The accrued interest amounted to approximately $972,000 and $759,000 at March 31, 2016 and June 30, 2015,
respectively. The Convertible Notes Payable bear interest at rates ranging between 8% and 18% per annum. Interest is generally
payable monthly. The Convertible Notes Payable are generally convertible at rates ranging from $0.00005 to $0.00125 per share,
at the holders’ option. At March 31, 2016, approximately $0.8 million of convertible promissory notes had matured, are in
default, and remain unpaid.



Changes
in convertible notes payable during the nine months ended March 31, 2016 was as follows:



|Convertible notes payable @ 06/30/2015                       |  | $ | 1,571,730 |  
|------------------------------------------------------------ |  | - | --------- | -
|Notes payable issued for cash                                |  |   | 260,000   |  
|Cash payments on convertible notes payable                   |  |   | (5,000    | )
|ASC debt returned in exchange for convertible notes payable  |  |   | 677,146   |  
|Exchange of notes payable for Series A and B preferred stock |  |   | (799,527  | )
|Balance of convertible notes payable @ 03/31/2016            |  | $ | 1,704,349 |  



Notes
Payable



The
Company had promissory notes aggregating $215,241 and $90,241 at March 31, 2016 and June 30, 2015, respectively. The related accrued
interest amounted to approximately $194,000 and $19,000 at March 31, 2016 and June 30, 2015, respectively. The notes payable bear
interest at rates ranging from 12.5% to 16% per annum which is payable monthly. All of these promissory notes outstanding as of
March 31, 2016 have matured, are in default, and remain unpaid.



Transactions



During
the nine months ended March 31, 2016, the Company issued fifteen convertible notes totaling $260,000, with interest rates ranging
from 8% to 14%.



Between
December 2015 and February, 2016, ten existing convertible note holders exchanged an aggregate of $799,527 of their outstanding
convertible notes and accrued interest thereon of $429,625 into 3,571,640 shares of Series A and B preferred stock, par value
$0.001, valued based on the quoted value of the common stock on an “as-converted” basis at a total of $1,371 (See
also Note 7). This transaction was accounted for as an extinguishment of debt, and the gain of $1,227,781 was included in the
accompanying statement of operations as gain on extinguishment of debt. The number of shares of newly designated Series A and
B preferred stock issued to each note holder was calculated by dividing their total principal and accrued interest thereon as
of November 30, 2015 by $0.25. The holders of the Series A and B preferred shares are restricted from converting their shares
to common stock for two years (the “Lock-Up Period”). After the Lock-Up Period,
they may convertup to one percent of their Series A preferred shares into common shares on a one for five basis each month
for four years (the “Leak-Out Period”). However, the conversion price automatically reduces by 30% to $0.035 per share
if the price of our common stock is below $0.10 per share on a conversion date.At
the end of the Leak-Out Period, up to all of the remaining Series A preferred shares may be converted to common stock at the shareholders’
discretion.



The
Company recognized interest expense of $230,969 and $235,668 during the nine-month periods ended March 31, 2016 and 2015, respectively
which included debt discount amortization of $0 and $79,623 during the nine month period ended March 31, 2016 and 2015, respectively.



On
October 9, 2014, the Company entered into a Settlement Agreement with IBC Funds, LLC (“IBC’). This agreement was approved
by the Manatee County, Florida Court on October 10, 2014. Pursuant to the Settlement Agreement, the Company agreed to settle approximately
$259,000 of outstanding liabilities (the “IBC Claim Amount”) by issuing IBC 859,000,000 shares of its common stock
at a price per share equal to fifty percent of the lowest sales price of the common stock during the fifteen day trading period
preceding the request of payment. In the event the Company was delinquent on issuance of the Company’s shares upon request
by IBC, the discount would be increased by five percent and by an additional five percent for each additional delinquency until
all settlement shares had been received. During October 2014, IBC paid an aggregate of $66,000 to various Company creditors. On
February 12, 2015 IBC issued a letter of default to the Company. The Company issued to IBC an additional 429,371,000 common shares
valued at $116,874.



12







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
6: OBLIGATIONS TO ASC RECAP, LLC



In
July, 2013, certain of the Company’s creditors showed interest in selling their claims against the Company to ASC Recap,
LLC (“ASC”); this group also included both current and past management of the Company. This led to the Company signing
a Liability Purchase Agreement with ASC on July 23, 2013. This Agreement required the Company to issue common shares within five
business days of each purchase at a 25% discount from the market price to ASC in amounts equal to the claims purchased from the
Company’s creditors. In addition, under the terms of the Agreement, the Company issued a $25,000 non-interest bearing convertible
promissory note to ASC, as described in Note 4.



ASC
signed a series of Claim Purchase Agreements with certain creditors of the Company to purchase their claims against the Company
totaling $2,531,565. These claims consisted of notes payable, convertible notes payable, vendor payables and accrued compensation
to the Company’s CEO and to a related party. The Claim Purchase Agreements required ASC to settle the creditors’ claims
against the Company for a total of $1,305,996. Each Claim Purchase Agreement stipulated that ASC would pay each creditor the agreed-upon
amount in up to twelve (12) monthly installments.



In
January, 2014, the Company had not issued any shares to ASC as required by the agreement. As a result, ASC filed a complaint in
Leon County, Florida demanding the prescribed issuance of shares from the Company for the purchased claims. A settlement agreement
was reached on February 6, 2014, and on March 12, 2014 ASC Recap filed a motion in Leon County, Florida which forced the Company
to comply. ASC Recap was awarded a $2,531,565 judgement which was to be paid by issuing free trading common stock at a 25% discount
from the market price. In addition, on May 6, 2014, the Company issued a $125,000 non-interest bearing convertible
promissory note to ASC, as described in Note 4. Between April and June of 2014, the Company issued to ASC 322,220,000 shares of
common stock with an aggregate market value of $365,308, which reduced the recorded liability by $273,981; in July of 2014, the
Company issued 82,980,000 shares of common stock with an aggregate market value of $24,894 (see Note 6).



On
August 13, 2015 ASC Recap, LLC issued the Company a letter of default related to its agreement to settle outstanding liabilities
and related accrued interest and returned approximately $2,373,000 of liabilities to their original holders, which is detailed
in the table at the end of Note 6. These balances reflect the payments made by ASC to creditors prior to the default.



An
analysis of the settlement liability due to ASC is as follows:



|Total creditor claims purchased by ASC - as ratified by the settlement agreement
    dated February 6, 2014                                                     |  |   |         |   |  | $ | 2,531,565  |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | - |  | - | ---------- | -
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Reduction of liability by shares issued between April and June 2014:                                                                                            |  |   |         |   |  |   |            |  
|Market value of 322,220,000 common shares issued                                                                                                                |  | $ | 365,308 |   |  |   |            |  
|Less 25% discount as per settlement agreement                                                                                                                   |  |   | (91,327 | ) |  |   | (273,981   | )
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Cash Payments and adjustments                                                                                                                                   |  |   |         |   |  |   | (50,599    | )
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Liability after issuances of shares, cash payments, and adjustments                                                                                             |  |   |         |   |  |   | 2,206,985  |  
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Add back the previous reduction of liability by shares issued in consideration
    of ASC waiving its right to additional shares under the settlement agreement |  |   |         |   |  |   | 273,981    |  
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Liability as of June 30, 2014 agreed to by the Company and ASC                                                                                                  |  |   |         |   |  |   | 2,480,966  |  
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Increase in recorded liability by the market value of 82,980,000 common
    shares issued during July 2014                                                      |  |   |         |   |  |   | 24,894     |  
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Carrying value of settlement liability due to ASC at June 30, 2014                                                                                              |  |   |         |   |  |   | 2,505,860  |  
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Reduction of liability by shares issued in September 2014:                                                                                                      |  |   |         |   |  |   |            |  
|Cash payments and adjustments                                                                                                                                   |  |   |         |   |  |   | (133,347   | )
|Carrying value of settlement liability due to ASC at June 30, 2015                                                                                              |  |   |         |   |  | $ | 2,372,513  |  
|                                                                                                                                                                |  |   |         |   |  |   |            |  
|Transfer of liability due to ASC to Original debt-holders                                                                                                       |  |   |         |   |  |   | (2,372,513 | )
|Carrying value of settlement liability due to ASC at March 31, 2016                                                                                             |  |   |         |   |  | $ | -          |  



The
transfer of liability due to ASC Recap consisted of the following:



|Notes payable                            |  | $ | 902,146   |  
|---------------------------------------- |  | - | --------- | -
|Accounts payable and accrued liabilities |  |   | 90,360    |  
|Accrued salaries                         |  |   | 702,924   |  
|Loss on settlement of ASC liability      |  |   | (12,135   | )
|Accrued interest payable                 |  |   | 689,218   |  
|                                         |  | $ | 2,372,513 |  



13







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
7: STOCKHOLDERS’ DEFICIT



Common
Stock



The
Company’s certificate of incorporation was amended on July 23, 2014 to increase the number of authorized shares of common
stock by one billion common shares bringing total authorized common shares to one billion seven hundred fifty million common shares.
On October 5, 2015 the Company increased its authorized common shares to 10,000,000,000 and on April 21, 2016 the Company increased
its authorized common shares to 20,000,000,000 at $0.0001 par value per share.



On
October 29, 2015, we dissolved the corporation in Nevada and simultaneously incorporated it in Florida. The Florida Articles of
Incorporation, as amended, authorize the Company to issue twenty billion one hundred million shares of stock of which twenty billion
may be shares of its common stock, par value $0.0001 per share, and one hundred million may be shares of its preferred stock,
par value $0.001 per share.



Transactions



On
October 9, 2015, we issued five billion shares of our common stock, twenty-six shares of Series F preferred stock, with a stated
value of $5,000 and a par value of $0.001 per share, and three shares of Series H Preferred Stock, with a stated value of $1,000
and a par value of $0.001 per share, to the Company’s current Chairman of the Board in exchange for $633,000 in accrued
compensation, resulting in a gain on extinguishment of debt of $132,468. Subsequently, in October 2015, these Series F and Series
H shares were exchanged for 532,000 shares of Series A preferred stock.



During
the nine months ended March 31, 2016, the Company issued 499,000,000 shares of common stock to its CEO as compensation, valued
at $49,900, or $0.0001 per share, based on the quoted market price.



Preferred
Stock



All
issued and outstanding shares of the Company’s preferred stock have a par value of $0.001 per share and rank prior to any
class or series of the Company’s common stock as to the distribution of assets upon liquidation, dissolution or winding
up of the Company or as to the payment of dividends, except for Series Y Preferred Stock. The Series B, C, D, F, H, I, J, and
Y preferred shares were exchanged in full for shares of Series A preferred stock in October, 2015, and those series of preferred
stock, along with Series E and G, which have had no stock issuances, were subsequently cancelled by the Company.



The
Series B shares exchanged, along with the other series of preferred shares exchanged, were designated during the Company’s
incorporation in Nevada. Upon incorporation in Florida, the Company designated a new Series A class of preferred stock, along
with a new Series B class of preferred stock.



Series
A Preferred Stock



The
Series A Preferred Stock has a stated value of $0.25 per share. Each one share of Series A Preferred Stock is convertible into
one (1) share of Common Stock. In the event the Common Stock price per share is lower than $0.10 (ten cents) per share then the
Conversion shall be set at $0.035 per share. The Common Stock shares are governed by Lock-Up/Leak-Out Agreements.



Series
B Preferred Stock



At
March 31, 2016, the Series B Preferred Stock issued under the Florida incorporation has a stated value of $0.25 cents per share.
Each share of Series B preferred Stock is convertible in 5 shares of the Company’s common stock. In the event the Common
Stock price per share is lower than $0.10 (ten cents) per share then the Conversion shall be set at $0.035 per share. The Common
Stock shares are governed by a Lock-Up/Leak-Out Agreement.



Prior
to October 28, 2015, the Series B preferred stock issued under the prior Nevada incorporation had a stated value of $5.00 per
share. Each share of Series B preferred stock was convertible into 20 shares of the Company’s common stock. In addition,
the holders of Series B preferred stock were entitled to receive cumulative annual dividends of 10% payable in cash or shares
of the Company’s common stock, at the Company’s option. These dividends, which totaled $617,000 at October 28, 2015,
were forfeited upon the cancellation of the series of preferred stock.



Series
C Preferred Stock



Prior
to October 28, 2015, the Series C Preferred Stock had a stated value of $30.00 per share. Each share of Series C Preferred Stock
was convertible in 100 shares of the Company’s common stock.



Series
D Preferred Stock



Prior
to October 28, 2015, the Series D Preferred Stock had a stated value of $25,000 per share. Each share of the Series D preferred
Stock was convertible in 1,000,000 shares of the Company’s common stock. In addition, the holders of the Series D Preferred
Stock were entitled to receive a participation interest in the annual net profits generated from any future business activities
undertaken by the Company in Brazil.



Series
F Preferred Stock



Prior
to October 28, 2015, the Series F Preferred Stock had a stated value of $5,000 per share. Each share of Series F Preferred Stock
was convertible in 200,000 shares of the Company’s common stock.



14







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
7: STOCKHOLDERS’ DEFICIT, continued



Series
H Preferred Stock



Prior
to October 28, 2015, the Series H Preferred Stock had a stated value of $1,000 per share. Each share of Series H Preferred Stock
was convertible in 1,000,000 shares of the Company’s common stock.



Series
I Preferred Stock



Prior
to October 28, 2015, the Series I Preferred Stock had a stated value of $10.00 per share. Each share of Series I Preferred Stock
was convertible into 500 shares of the Company’s common stock.



Series
J Preferred Stock



Prior
to October 28, 2015, the Series J Preferred Stock had a stated value of $2,500 per share. Each share of the Series J Preferred
Stock was convertible into the Company’s common shares using a conversion price equal to 50% of the average closing price
of the Company’s common stock for the ten trading days immediately preceding the conversion date, although in no instance
less than $0.01 per share or greater than $0.03 per share.



Series
Y Preferred Stock



Prior
to October 28, 2015, the Series Y Preferred Stock had a stated value of $0.01 and had no liquidity preference. Each share of Series
Y Preferred Stock had 200 votes per share and had the right to vote with the common shareholders in all matters.



Transactions



On
February 18, 2016 a holder of a short term note was issued 220,000 shares of Series A preferred stock valued based on the as-converted
market price of $22, in exchange for principal in the amount of $100,000, and accrued interest in the amount of $103,022. The
exchange resulted in a gain on extinguishment of debt of $203,000.



On
October 14, 2015 a former Chairman of the Board of the Company was issued 80 shares of Series F preferred stock with a stated
value of $5,000 and a par value $0.001 per share, and 12 shares of Series H preferred stock, with a stated value of $1,000 and
a par value $0.001 per share in consideration for his forgiveness of $412,000 in accrued compensation, resulting in a gain on
extinguishment of debt of $396,075. Subsequently, in October 2015, these Series F and Series H shares were exchanged for 1,648,000
shares of Series A preferred stock.



On
October 28, 2015, preferred shareholders representing a majority of each series of our outstanding preferred stock, voted to cancel
all their shares of preferred stock in exchange for 11,181,340 shares of newly designated Series A preferred stock. The number
of shares of newly issued Series A preferred stock issued to each preferred shareholder was calculated by dividing the total stated
value of their preferred shares by $0.25. The holders of the Series A preferred shares are restricted from converting their shares
to common stock for two years (the “Lock-Up Period”). After the Lock-Up Period,
they may convertup to one percent of their Series A preferred shares into common shares on a one for one basis each month
for four years (the “Leak-Out Period”). However, the conversion price automatically reduces by 86% to $0.035 per share
if our common stock is below $0.10 per share.At the end of the Leak-Out Period,
up to all of the remaining Series A preferred shares may be converted to common stock at the shareholders’ discretion.



|Class    |  | Shares
    Cancelled |          |   | Shares of 
    Series A Issued | 
|-------- |  | -------------------- | -------- | - | ------------------------------ | 
|Series B |  |                      | (149,600 | ) |                                | 
|Series C |  |                      | (332     | ) |                                | 
|Series D |  |                      | (19      | ) |                                | 
|Series F |  |                      | (234     | ) |                                | 
|Series H |  |                      | (85      | ) |                                | 
|Series I |  |                      | (30,000  | ) |                                | 
|Series J |  |                      | (2       | ) |                                | 
|Total    |  |                      |          |   |                                | 



On
October 28, 2015 the 87,000 shares of Series Y preferred stock, owned by the Company’s former Chairman of the Board, were
exchanged for 87,000 shares of Series A preferred stock. These shares of Series A preferred stock were valued at their fair market
value of $8.70.



In
November, 2015, we sold 40,000 shares of Series A preferred stock to one investor for $10,000 and sold 100,000 shares of Series
B preferred stock to another investor for $25,000.



In
February, 2016, a former employee was issued 20,000 of Series A Preferred stock, valued at $2, in consideration for his forgiveness
of $75,715 in accrued compensation, resulting in a gain on extinguishment of debt of $75,713.



See
Note 5 for Series B preferred stock issued in exchange for convertible notes payable and accrued interest.



15







NUSTATE
ENERGY HOLDINGS, INC.

NOTES
TO UNAUDITED FINANCIAL STATEMENTS

MARCH
31, 2016



NOTE
8: RELATED PARTY TRANSACTIONS



On
September 9, 2015, the Company entered into a one-year consulting agreement with Hippocrates Management Company, Inc. for general
business consulting services. The consultant is a related party to Kathy Roberton, our Chief Executive Officer. The contractual
payments to the consultant include a payment of $5,000 in cash per month beginning October 1, 2015. During the nine months ended
March 31, 2016 the Company had paid consulting fees of $40,000.



The
Company has entered into a consulting agreement with a related party by means of common ownership and management with the Company
as compensation to our Chairman of the Board and Chief Financial Officer. During the nine months ended March 31, 2016 and 2015
the Company had incurred consulting fees and related expense reimbursements of $95,750 and $79,400, respectively.



NOTE
9: COMMITMENTS



On February 26, 2016, the Company entered
into a Binding Letter of Intent with MK Technologies LLC in relation to the purchase of its Fuel Enhancement Technologies and
all of its Assets, in exchange for total consideration of $2,000,000. Of this amount, $1,000,000 is to be paid in cash at closing
and $1,000,000 is to be paid in stock, cash or a combination thereof on a mutually agreed schedule. Additional consideration consists
of royalties and consulting fees as per a mutually approved royalty agreement and paid consulting agreement on a mutually agreed
schedule, with these agreements to be executed on or before closing.



The Company is currently in its due diligence
process with regards to this transaction, which also requires MK Technologies LLC to execute an agreement with another entity
for related services. In the event that this related agreement is delayed past the closing date, the total consideration is reduced
from $2,000,000 to $1,000,000, consisting of $100,000 in cash at closing and $900,000 to be paid in stock, cash or a combination
thereof on a mutually agreed schedule.



NOTE
10: SUBSEQUENT EVENTS



The
Company has evaluated subsequent events through the filing date of this Form 10-Q, and determined that no subsequent events have
occurred that would require recognition in the financial statements or disclosure in the notes.



16







ITEM
2. Management’s Discussion and Analysis and Results of Operations



The
following discussion of our financial condition and results of operations should be read in conjunction with the financial statements
and related notes included elsewhere in this report. Certain statements in this discussion and elsewhere in this report constitute
forward-looking statements. See ’‘Cautionary Statement Regarding Forward Looking Information’’ elsewhere
in this report. Because this discussion involves risk and uncertainties, our actual results may differ materially from those anticipated
in these forward-looking statements.



Overview



The
company was incorporated in Nevada as Jaguar Investments, Inc. during October 1987. During March 2003, a wholly owned subsidiary
of the Company merged with Freight Rate, Inc., a development stage company in the logistics software business. During May 2003,
the Company changed its name to Power2Ship, Inc. During October 2006, the Company merged with a newly formed, wholly owned subsidiary,
Fittipaldi Logistics, Inc., a Nevada corporation, with the Company surviving but its name changed to Fittipaldi Logistics, Inc.
effective November 2006. During December 2007, the Company merged with a newly formed, wholly owned subsidiary, NuState Energy
Holdings, Inc., a Nevada corporation, with the Company surviving but renamed NuState Energy Holdings, Inc. effective December
2007.



On
February 12, 2009, the Company filed Form 15 to terminate registration of its common stock under section 12(g) of the Securities
Exchange Act of 1934 and subsequently has not submitted any filings to the Securities and Exchange Commission. During the period
from February 2009 through April 2010, the Company had several changes to its officers and directors and moved its offices twice.
The Company’s Chairman and President since April 2010, and its Chief Executive Officer from July 2010 through July 2015,
is Kevin Yates and its Chief Executive Officer since July 2015 is Kathleen Roberton. The Company’s headquarters is located
at 401 E. Las Olas Boulevard, Suite 1400, Fort Lauderdale, FL 33301. Since April 2010, the Company’s current management
developed, and began implementing, the following strategic plan designed to increase the Company’s shareholders’ value:



| | 1. | Improve
    the Company’s balance sheet by reducing liabilities and regaining use of certain of its intellectual property and software,                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                     
| | 2. | Settle
    litigation,                                                                                                                                              
| |    |                                                                                                                                                                     
| | 3. | Identify
    potential merger or acquisition candidates with whom the Company could enter into a transaction upon the Company achieving
    items 1 and 2 above, and
| |    |                                                                                                                                                                     
| | 4. | License
    its intellectual property and software, also known as My Driver’s Seat, which it regained in April 2010.                                                



This
strategic plan has resulted in the following material events:



Regained
Use of Intellectual Property



As
part of an agreement entered into with Rentar Environmental Solutions, Inc. (“Rentar”) in April 2010, the Company
agreed to share with Rentar all right, title and interest in and to intellectual properties and software, My Driver’s Seat,
which it had developed for the worldwide transportation and security industries and had sold in April 2008 to Rentar Logic, a
Delaware corporation and an affiliate of Rentar. The intellectual property that the Company agreed to share with Rentar included
a patent titled “Dynamic and Predictive Information System and Method for Shipping Assets and Transport”.



Licensing
Use of Intellectual Property



NuState
Energy Holdings, Inc. signed a definitive agreement with The Ronn Motor Group, with offices in Dalian, China and the United States,
to license and market NuState’s IP software, GPSTrax©, for use by Ronn Motor Group’s partners in China and other
international markets.



On
February 26, 2016, we agreed to suspend the definitive agreement with Ronn Motor Group as Ronn Motor Group is going through a
corporate restructuring.



On
February 26, 2016 we entered into a Binding Letter of Intent with MK Technologies LLC (a related party to Ronn Motor Group), in
relation to the purchase of its Fuel Enhancement Technologies and all its Assets, for total consideration of $2,000,000. $1,000,000
will be paid at closing, with the balance of the purchase price paid out in accordance with a mutually approved royalty agreement
and paid consulting agreement, and $1,000,000 to be paid in stock, cash, or a combination on a mutually agreed schedule.



We
are unable to determine at this time whether we will be successful in capitalizing on the aforementioned opportunities in our
business environment without proper funding.



17







NUSTATE
ENERGY HOLDINGS, INC.

RESULTS
OF OPERATIONS



Discussion
of Results for Three and Nine Month Periods Ended March 31, 2016 and 2015



|                                                       |  | Three Months Ended |           |   | Nine Months Ended |  
|------------------------------------------------------ |  | ------------------ | --------- | - | ----------------- | -
|                                                       |  | March 31,          |           |   | March 31,         |  
|                                                       |  | 2016               |           |   | 2015              |  
|Operating expenses:                                    |  |                    |           |   |                   |  
|Selling, general and administrative                    |  | $                  | 174,366   |   |                   | $
|Total Operating Expenses                               |  |                    | 174,366   |   |                   |  
|                                                       |  |                    |           |   |                   |  
|Loss from Operations                                   |  |                    | (174,366  | ) |                   |  
|                                                       |  |                    |           |   |                   |  
|Other income (expenses):                               |  |                    |           |   |                   |  
|Gain on change in fair value of derivative liabilities |  |                    | 3,254     |   |                   |  
|Interest expense                                       |  |                    | (64,713   | ) |                   |  
|Gain on extinguishment of debt                         |  |                    | 1,216,805 |   |                   |  
|Loss on debt settlement                                |  |                    | -         |   |                   |  
|Total other income (expenses)                          |  |                    | 1,155,346 |   |                   |  
|                                                       |  |                    |           |   |                   |  
|Net income (loss)                                      |  | $                  | 980,980   |   |                   | $



Selling,
General, and Administrative Expenses



For
the three and nine months ended March 31, 2016, selling, general and administrative expenses were $174,366 and $575,635 respectively,
as compared to $84,045 and $263,538 for the three and nine months ended March 31, 2015, respectively. For the three and nine month
periods ended March 31, 2016 and 2015 selling, general and administrative expenses consisted of the following:



|                   |  | Three Months Ended |         |  | Nine Months Ended |  
|------------------ |  | ------------------ | ------- |  | ----------------- | -
|                   |  | March 31,          |         |  | March 31,         |  
|                   |  | 2016               |         |  | 2015              |  
|Accounting expense |  | $                  | 45,194  |  |                   | $
|Consulting fees    |  |                    | 21,800  |  |                   |  
|Salaries           |  |                    | 87,500  |  |                   |  
|Travel             |  |                    | -       |  |                   |  
|Other              |  |                    | 19,872  |  |                   |  
|                   |  |                    | 174,366 |  |                   |  



The
increase in selling, general and administrative expenses during fiscal 2016, when compared with the prior year, is primarily due
to an increase in accounting expense, salaries and consulting fees, which is due to increased activity during the current fiscal
year.



We
believe that our selling, general, and administrative expenses will continue at their current rate as we continue to focus our
resources on the search for a business opportunity for the remainder of 2016. Should we begin merger or acquisition procedures,
we believe that our selling, general, and administrative expenses will substantially increase.



Decrease
in Fair Value of Derivative Liabilities



Derivative
liabilities decreased from $295,808 to $270,798, or $25,010. The decrease in the fair value of derivative liabilities results
from the changes in the fair value of the derivative liability due to the application of ASC 815, resulting in either income or
expense, depending on the difference in fair value of the derivative liabilities between their measurement dates. The decrease
in fair value of derivative liabilities recognized during the nine-month period ended March 31, 2016 is primarily due to the market
price of our common stock during the period. The decrease in fair value of derivative liabilities recognized during the nine-month
period ended March 31, 2015 is primarily due to an increase of our common stock quoted price between measurement dates and during
such periods, respectively. Our common stock quoted price is one of the primary assumptions used in the computation of our derivative
liabilities.



18







Interest
Expense



|                 |  | Three-Months Ended |        |  |      |   |        | Nine-Months Ended |  |  |       |   
|---------------- |  | ------------------ | ------ |  | ---- | - | ------ | ----------------- |  |  | ----- | --
|                 |  | March 31,          |        |  | %    |   |        | March 31,         |  |  | %     |   
|                 |  | 2016               |        |  | 2015 |   |        | Change            |  |  | 2016  |   
|Interest expense |  | $                  | 64,713 |  |      | $ | 83,205 |                   |  |  | (22.2 | %)



Interest
expense represents stated interest of notes and convertible notes payable as well as amortization of debt discount. The decrease
in interest expense during the three and nine month periods ended March 31, 2016 is primarily due to lower amortization of debt
discount during the Nine-month period ended March 31, 2016, when compared to the prior year period.



Gain
on extinguishment of debt



During
the nine months ended March 31, 2016, the Company recognized a gain as a result of the exchange of notes payable, accrued salaries,
and certain classes of preferred stock into shares of Series A and Series B preferred stock in the amount of $2,030,395.



|                                                                         |  | Nine Months Ended |          
|------------------------------------------------------------------------ |  | ----------------- | ---------
|                                                                         |  | March 31, 2016    |          
|Loss on exchange of preferred shares for Series A and B preferred shares |  | $                 | (4,642   
|Gain on exchange of convertible notes payable for preferred stock        |  |                   | 1,227,781
|Gain on exchange of short term notes payable for preferred stock         |  |                   | 203,000  
|Gain on shares exchanged for accrued salary payable                      |  |                   | 604,256  
|                                                                         |  | $                 | 2,030,395



Liquidity
and Capital Resources



At
March 31, 2016 and 2015, 100% of our total assets consisted of cash.



We
do not have any material commitments for capital expenditures.



The
objective of liquidity management is to ensure that we have ready access to sufficient funds to meet commitments and effectively
implement our growth strategy. Our primary sources are financing activities such as the issuance of notes payable and convertible
notes payable. In the past, we have mostly relied on debt and equity financing to provide for our operating needs.



We
cannot ascertain that we have sufficient funds from operations to fund our ongoing operating requirements through June 30, 2016.
We may need to raise funds to enhance our working capital and use them for strategic purposes. If such need arises, we intend
to generate proceeds from either debt or equity financing.



We
intend to finance our operations using a mix of equity and debt financing. We do not anticipate incurring capital expenditures
for the foreseeable future. We anticipate that we will need to raise approximately $180,000 per year in the near term to finance
the recurring costs of being a publicly-traded company. In the long-term, we anticipate we will need to raise a substantial amount
of capital to complete an acquisition. We are unable to quantify the resources we will need to successfully complete an acquisition.
If these funds cannot be obtained, we may not be able to consummate an acquisition or merger, and our business may fail as a result.



During
the Nine Months Ended March 31, 2016 we have taken aggressive steps to strengthen the balance sheet by successfully exchanging
debt held by our noteholders for shares of our Series A and Series B preferred stock at substantial discounts to the face value
of the notes payable. We have been able to do this because the noteholders have agreed that this is a necessary step to provide
the Company an opportunity to successfully execute on its business plan.



Going
Concern



The
accompanying financial statements have been prepared on a going concern basis. The Company has used net cash in its operating
activities of approximately $334,000 and $179,000 during the nine-month period ended March 31, 2016 and the year ended June 30,
2015, respectively, and has a working capital deficit of approximately $4.0 million and $5.9 million at March 31, 2016 and June
30, 2015, respectively. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the
necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due,
to fund possible future acquisitions, and to generate profitable operations in the future, once a merger with an operating company
is consummated. Management plans may continue to provide for its capital requirements by issuing additional equity securities
and debt and the Company will continue to find possible acquisition target. The outcome of these matters cannot be predicted at
this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its business plan or
generate positive operating results.



19







|                                                                            |  | Nine-Month Period Ended |           
|--------------------------------------------------------------------------- |  | ----------------------- | ----------
|                                                                            |  | March 31,               |           
|                                                                            |  | 2016                    |           
|Cash flows from operating activities:                                       |  |                         |           
|Net income (loss)                                                           |  | $                       | 1,236,667 
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                         |           
|(Gain) loss on extinguishment of debt                                       |  |                         | (2,030,395
|Loss on debt settlement                                                     |  |                         | 12,135    
|Gain on change in fair value of derivative liability                        |  |                         | (25,010   
|Amortization of debt discount                                               |  |                         | -         
|Stock-based compensation                                                    |  |                         | 49,900    
|Changes in operating assets and liabilities:                                |  |                         |           
|Accounts payable                                                            |  |                         | (11,378   
|Accrued interest                                                            |  |                         | 230,968   
|Accrued compensation                                                        |  |                         | 203,073   
|Net cash used in operating activities                                       |  |                         | (334,040  
|                                                                            |  |                         |           
|Cash flows from financing activities:                                       |  |                         |           
|Proceeds from issuance of convertible notes payable                         |  |                         | 260,000   
|Repayment of notes payable                                                  |  |                         | (5,000    
|Proceeds from sales of preferred stock                                      |  |                         | 85,000    
|Net cash provided by financing activities                                   |  |                         | 340,000   
|                                                                            |  |                         |           
|Net increase in cash                                                        |  | $                       | 5,960     



Nine
Months Ended March 31, 2016



Net
cash used in operations during the nine months ended March 31, 2016 increased by $194,222 or 139% over the same period during
fiscal year 2015. The increase in cash used in operations is primarily due to the increase in cash paid for consulting fees of
$56,350, the increase in cash paid for salaries to executives of $51,893, and the increase in cash paid for audit and related
services of $37,500. This cash was obtained through the sale of $260,000 of convertible promissory notes and the sales of $85,000
of convertible preferred stock.



Nine
Months Ended March 31, 2015



Net
cash used in operations during the nine months ended March 31, 2015 totaled $139,818. This cash was obtained through the sale
of $140,000 of convertible promissory notes.



Capital
Raising Transactions



Sale
of Preferred Stock



We
generated proceeds of $85,000 from the sale of Series A and Series B preferred shares during the nine-month period ended March
31, 2016.



Issuance
of convertible notes payable



We
generated proceeds of $260,000 from the issuance of convertible note payable during the nine-month period ended March 31, 2016.



Other
outstanding obligations at March 31, 2016



Convertible
Notes Payable



The
Company had convertible promissory notes aggregating $1.7 million outstanding at March 31, 2016. The accrued interest amounted
to approximately $972,000 as of March 31, 2016. The Convertible Notes Payable bear interest at rates ranging between 8% and 18%
per annum. Interest is generally payable monthly. The Convertible Notes Payable are generally convertible at rates ranging between
$0.00005 and $0.00125 per share, at the holders’ option. March 31, 2016, all convertible promissory notes have matured,
are in default, and remain unpaid.



Notes
Payable



The
Company had promissory notes aggregating approximately $215,241 at March 31, 2016. The related accrued interest amounted to approximately
$194,000 at March 31, 2016. The Notes Payable bear interest at rates ranging between 8% and 16% per annum. Interest is generally
payable monthly. All promissory notes have matured, are in default, and remain unpaid as of March 31, 2016.



Off-Balance
Sheet Arrangements



We
have no off-balance sheet arrangements.



20







Item
3. Quantitative and Qualitative Disclosures About Market Risk



Not
applicable to a smaller reporting company.



Item
4. Controls and Procedures



Evaluation
of disclosure controls and procedures. Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”)
have evaluated the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and
15d-15(e)) as of the end of the period covered by the Quarterly Report (the “evaluation date’). They have concluded
that, as of the evaluation date, these disclosure controls and procedures were not effective to provide reasonable assurance that
material information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms.



Changes
in internal control over financial reporting. There have been no changes in our internal control over financial reporting
identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred
during the Registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.



Evaluation
of Disclosure Controls and Procedures



Our
management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness
of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, or
the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March
31, 2016, our disclosure controls and procedures were not effective in ensuring that material information required to be disclosed
in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated
to our Chief Executive Officer to allow timely decisions regarding required disclosure. The lack of effectiveness of our
disclosure controls and procedures are due to the lack of a segregation of duties, as a result of our limited personnel.



Changes
in Internal Control Over Financial Reporting



During
the quarter ended March 31, 2016, there were no changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.



21







PART
II - OTHER INFORMATION



Item
1. Legal Proceedings.



At
March 31, 2016 the Company is not the subject of, or party to, any pending or threatened, legal actions.



From
time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time
to time that may harm our business.



Item
1A. Risk Factors.



In
addition to the other information set forth in this report, you should carefully consider the factors discussed under the heading
“Risk Factors” in our Annual Report on Form 10-K filed on April 11, 2016, which could materially affect our business
operations, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently
deem to be immaterial also may materially adversely affect our business operations and/or financial condition. There have been
no material changes to our risk factors since the filing of our Form 10-K.



Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.



Item
3.Defaults
Upon Senior Securities.



None



Item
4. Mine Safety Disclosures.



Not
applicable to our operations.



Item
5.Other
Information.



None



Item
6. Exhibits



|31.1 | Certification
    of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14(a) and15d-14(a).*                                                                                                                                                                                                                   
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                              
|32.1 | Certification
    of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. 1350.**                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                              
|101. | The
    following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended MARCH 31, 2016, formatted
    in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements
    of Cash Flows, and (iv) related notes to these financial statements.**



|*  | Filed
    herewith.    
|-- | -----------------------
|** | Furnished
    herewith.



22







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.



|                  | NUSTATE
    ENERGY HOLDINGS, INC.
|----------------- | ---------------------------------
|                  |                                  
|July
    18, 2016 | By:                              
|                  |                                  
|                  |                                  
|                  |                                  
|July
    18, 2016 | By:                              
|                  |                                  
|                  |                                  



23