<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
    (Mark One)

[ ]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]


                                       OR

[X]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from   January 1, 2001        to   June 30, 2001
                                -----------------------    ---------------------

                        Commission file number: 333-59109

                                ABLE ENERGY, INC.
             (Exact name of registrant as specified in its charter)

         DELAWARE                                                22-3520840
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification No.)

     198 GREENPOND ROAD
          ROCKAWAY, NJ                                              07866
(Address of principal executive offices)                         (Zip code)

Registrant's telephone number, including area code: (973) 625-1012

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:


                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                                (Title of class)


         Indicate by check mark whether 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 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 if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [ ]

         The Issuer's Revenues for the Most Recent Fiscal Year, June 30, 2001,
was $18,189,597.

         The aggregate market of the voting stock held by non-affiliates of the
registrant was approximately $3,804,750 as of the close of business on September
25, 2001.

         The number of shares of Common Stock, $.001 par value, issued and
outstanding as of September 25, 2001 was 2,001,250.

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                                     PART I
                                     ------

ITEM 1.       DESCRIPTION OF BUSINESS


HISTORY

         Able Energy was incorporated on March 13, 1997 in the state of
Delaware, to act as a holding company for five operating subsidiaries: Able Oil;
Able Propane; Able Melbourne; Able Montgomery and A&O.

         In August 1999, the company formed a wholly-owned subsidiary, Able
Energy Terminal, LLC for the sole purpose of purchasing property located at 344
Route 46 in Rockaway, New Jersey for the Company's operations.

         On December 31, 1999, the Company sold all of its outstanding shares of
Able Montgomery, its Pennsylvania retail heating oil distributor, to an
unaffiliated third party in exchange for monetary consideration and a ten-year
franchise agreement with the buyer.

         Also on December 31, 1999, the Company sold all of its outstanding
shares of common stock of A&O, its environmental consulting and engineering
subsidiary, to Owl Environmental, Inc., one of A&O's subcontractors, for nominal
consideration. The Company decided to sell A&O in light of A&O's continuing
operating losses.

         In October 2000, the Company began operations of a majority-owned
subsidiary, PriceEnergy.com, Inc. PriceEnergy was developed in order to bring
about efficient transactions in the liquid fuels market by streamlining the
ordering and delivery process utilizing Internet technology.


OVERVIEW

         The Company is engaged in the retail distribution of, and the provision
of services relating to, fuel oil, propane gas and diesel fuel. In addition to
selling home energy products, the Company offers complete HVAC (heating,
ventilation and air conditioning) installation and repair and also markets other
petroleum products to commercial customers, including diesel fuel, gasoline and
lubricants.

         In fiscal year 1998, sales of home heating oil accounted for
approximately 70% of the Company's revenues. The remaining 30% of revenues were
from sales of gasoline, diesel fuel, kerosene, propane and related sales. The
Company serves approximately 20,000 home heating oil customers from three
locations, of which two are located in New Jersey and one is located in Florida.

         The Company also provides installation and repair of heating equipment
as a service to its customers. The Company considers service and installation
services to be an integral part of its business. Accordingly, the Company
regularly provides service incentives to obtain and retain customers. The
Company provides home heating equipment repair service on a 24 hours-a-day,
seven days-a-week basis, generally within two hours of request. Except in
isolated instances, the Company does not provide service to any person who is
not a customer.

         The Company believes that it obtains new customers and maintains
existing customers by offering full service home energy products at discount
prices, providing quick response refueling and repair operations, providing
automatic deliveries to customers by monitoring historical use and weather
patterns, and by providing customers a variety of payment options. The Company
also regularly provides service incentives to obtain and retain customers. The
Company aggressively promotes its service through a variety of direct marketing
media, including mail and telemarketing campaigns, by providing discounts to
customers who refer new customers to the Company, and through an array of
advertising, including television advertisements and billboards, which aim to
increase brand name recognition. The Company believes that this focused
marketing strategy has been key to its success.

         The Company intends to expand its operations by acquiring select
operators in the Company's present markets as well as other markets, capturing
market share from competitors through increased advertising and other means,
diversifying its products, diversifying its customer base, and replicating its
marketing and service formula in new geographic areas either directly or through
franchise arrangements. The Company may also enter into marketing alliances with
other entities in product areas different than the Company's current product
mix.

                                       2
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RETAIL FUEL OIL

         The Company's retail fuel oil distribution business is conducted
through its subsidiaries Able Oil and Able Melbourne. The Company serves both
residential and commercial fuel oil accounts. The Company sells premium quality
home heating oil to its residential customers offering delivery seven
days-a-week. To its commercial customers, in addition to selling home heating
oil, the Company sells diesel fuel, gasoline and kerosene. The Company also
provides an oil burner service that is available 24 hours-a-day for the
maintenance, repair and installation of oil burners. These services are
performed on an as needed basis. Customers are not required to enter into
service contracts to utilize the Company's service department, however the
Company does offer such service contracts if desired.

         Approximately 50% of the Company's customers receive their home heating
oil pursuant to an automatic delivery system without the customer having to make
an affirmative purchase decision. These deliveries are scheduled by computer,
based on each customer's historical consumption patterns and prevailing weather
conditions. Customers can also order deliveries of home heating oil through the
Company's Web site located at www.ableenergy.com. The Company delivers home
heating oil approximately six times each year to the average customer. The
Company bills customers promptly upon delivery or receives payment upon
delivery. The Company's customers can pay for fuel deliveries with cash, check
or credit card.

         In addition, approximately 10% of the Company's total sales are made to
customers pursuant to an agreement which pre-establishes the maximum annual
sales price of fuel oil and is paid by customers over a ten month period in
equal monthly installments. Such prices are renegotiated in April of each year
and the Company has historically purchased fuel oil for these customers in
advance and at a fixed cost.

         The Company delivers fuel with its own fleet of 19 custom fuel oil
trucks and six owner-operator fuel oil delivery trucks. The Company's fuel
trucks have fuel capacities ranging from 3,000 to 8,000 gallons. Each vehicle is
assigned to a specific delivery route, and services between 4 and 40 customer
locations per day depending on market density and customers' fuel requirements.
The Company also operates 13 Company owned service vans and one owner-operated
service vans, which are equipped with state of the art diagnostic equipment
necessary to repair and/or install heating equipment. The number of customers
each van serves mostly depends upon the number of service calls received on any
given day.

ABLE OIL

         Able Oil was established in 1989 and is the Company's largest
subsidiary, accounting for approximately 86% of the Company's total revenues in
2000. Able Oil is headquartered in Rockaway, New Jersey, and serves just under
23,000 oil customer accounts throughout northern New Jersey, mostly in Morris,
Sussex, Warren, Passaic and Essex counties, from its distribution locations in
Rockaway and Newton, New Jersey. Of these accounts, approximately 90% are
residential customers and 10% are commercial customers.

         Generally, 19 of the Company's fuel oil trucks are reserved for use by
Able Oil, of which 12 trucks operate from the Rockaway facility and seven trucks
operate from the Newton, New Jersey, facility. In addition, Able Oil utilizes
the services of six owner-operated trucks. Each owner operator is under
contract; they are responsible for all of the vehicle operating expenses
including insurance coverage. All of the trucks have the Company's logo on them.

         Able Oil's 19 fuel oil delivery trucks, and the six owner-operator
trucks, acquire fuel inventory at the Company's facilities in Rockaway and
Newton. Dispatch of fuel oil trucks is conducted at both the Rockaway and Newton
facilities. Billing is conducted from Able Oil's corporate headquarters in
Rockaway.

         The Rockaway and Newton facilities have the capacity to store 1.5
million gallons and 200,000 gallons of fuel, respectively. During seasons where
demand for heating oil is higher, or when wholesale oil prices are favorable, a
slightly larger inventory is kept on hand. However, Management generally
believes that short inventory life and high inventory turnover enables the
Company to rapidly respond to changes in market prices. Thus, Management employs
"just in time" inventory practices and rarely stores fuel to capacity levels.
Additional fuel oil purchases are made daily on the spot market using electronic
funds transfers. Able Oil carts its fuel purchases from wholesale purchase sites
to the Rockaway and Newton facilities with two tractor-trailer tankers owned by
the Company, and by two owner-operated tractor-trailer tankers that are used on
an as needed basis. These two owner-operated tankers are under contract and bear
the Ablelogo or name.

         Able Oil's oil burner service operates exclusively out of the Newton
facility. Able Oil dispatches a total of 14 service vans, one of which is
subcontracted from an owner-operator.
                                       3
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ABLE MELBOURNE

         Able Melbourne was established in July 1996, and is located in Cape
Canaveral Florida. Presently, revenues from Able Melbourne account for
approximately 4% of the Company's total revenues. Able Melbourne is engaged
primarily in the sale of diesel fuel for commercial fleet fueling and other
on-road vehicles, and dyed diesel fuel, which is used for off-road vehicles and
purposes, including commercial and recreational fishing vessels, heating oil and
generator fuel. Additionally, a small portion of Able Melbourne's revenues is
generated from the sale of home heating oil, lubricants and lubricant products.
Able Melbourne serves approximately 300 customer accounts in Brevard County,
Florida, primarily in the Cape Canaveral Area.

         Able Melbourne delivers fuel with two fuel delivery trucks which are
capable of storing 6,000 gallons of fuel in aggregate. Because Able Melbourne's
peak season is at the opposite time of the year than the rest of the Company,
during this season, Able Melbourne uses one of Able Oil's trucks to meet its
demand. Currently, Able Melbourne does not have facilities to store fuel oil
beyond what is held on its trucks, and thus, purchases fuel inventory from local
refineries. However, since Able Melbourne is located only three miles from port
storage, the lack of inventory capacity is not material to the Company's
operations or revenue.


RETAIL PROPANE DISTRIBUTION

         The Company is engaged in the retail distribution of propane gas and
propane equipment, and provides services related thereto through its subsidiary
Able Propane. Able Propane, based in Rockaway, New Jersey, was established 1996
as part of the Company's efforts to increase market penetration through
diversification. Able Propane serves approximately 2,600 accounts, the majority
of which are located in northern New Jersey.

         Propane can be used for virtually all household and business utility
applications. Of Able Propane's customers, approximately 60% use propane for hot
water heating and cooking; approximately 10% use propane for pool heating; and
approximately 30% use propane for home heating. Although burned as a gas,
propane is transported as a liquid and stored in tanks that vaporize the liquid
for use. Able Propane provides its customers with such tanks at no charge, and
by doing so, remains such customer's exclusive supplier of propane. Able Propane
employs a delivery system similar to the Company's retail oil distribution
business, whereby customers receive propane deliveries pursuant to an automatic
delivery system without the customer having to make an affirmative purchase
decision. These deliveries are scheduled by computer, based on each customer's
historical consumption patterns and prevailing weather conditions.

         With a continued marketing effort, the Company believes that Able
Propane has the opportunity to gain a larger share of the New Jersey energy
market by converting electricity users to propane, and by encouraging owners of
newly-constructed homes and buildings to select propane as their energy source.
The Company also believes that the use of propane as an alternate fuel for cars,
trucks and public transportation to meet clean air requirements, poses a great
opportunity for future growth.

         Able Propane's base of operations is located in Rockaway, New Jersey,
at the Company's headquarters. Currently, Able Propane has no propane storage
facilities, and its only investment in propane inventory is what can be stored
on its four propane delivery truck. The delivery trucks have the capacity to
deliver 3,000 gallons of propane, and can service approximately 35 customers per
day. Able Propane purchases wholesale propane on the spot market at local
facilities. The Company is considering plans to lease or build a facility that
would enable Able Propane to store approximately 30,000 gallons of propane.


PRICEENERGY

         PriceEnergy started business in October 2000 and is a majority-owned
subsidiary of Able Energy, Inc. PriceEnergy was developed in order to bring
about efficient transactions in the liquid fuels market by streamlining the
ordering and delivery process utilizing Internet technology. PriceEnergy has
developed a business technology platform that enables the company to sell and
deliver liquid fuels and related energy products. This has been possible by
utilizing a branded distribution channel of dealers and Able Energy's own
delivery network. By leveraging its proprietary web technology and wireless
dispatch platform, PriceEnergy intends to achieve cost leadership and create a
competitive advantage in the industry.

         PriceEnergy is currently completing its dealer network throughout New
York, Pennsylvania, and New Jersey. Products and services will be ordered over
the Internet and forwarded to the local dealer to schedule delivery. PriceEnergy
receives payment and retains a four cent per gallon override on all oil ordered
through the system.

         Once the proper dealer network is in place, the company expects that
about 20 million gallons will be ordered in the following fiscal year. This will
result in a minimum gross revenue stream of $800,000, which is approximately the
break-even point of the enterprise.

                                       4
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EFFECT OF CHANGES IN GENERAL ECONOMY

         The Company's business is relatively unaffected by business cycles.
Because fuel oil, propane and gasoline are such basic necessities, variations in
the amount purchased as a result of general economic conditions are limited.


         CUSTOMER STABILITY

         The Company has a relatively stable customer base due to the tendency
of homeowners to remain with their traditional distributors. In addition, a
majority of the home buyers tend to remain with the previous owner's
distributor. As a result, the Company's customer base each year includes most
customers retained from the prior year, or home buyers who have purchased from
such customers. Like many other companies in the industry, the Company delivers
fuel oil and propane to each of its customers an average of approximately six
times during the year, depending upon weather conditions and historical
consumption patterns. Most of the Company's customers receive their deliveries
pursuant to an automatic delivery system, without the customer having to make an
affirmative purchase decision each time home heating oil or propane is needed.
In addition, the Company provides home heating equipment repair service on a
seven-days-a-week basis.

         No single customer accounts for 10% or more of the Company's
consolidated revenues.


         CONVERSION TO NATURAL GAS

         The rate of conversion from the use of home heating oil to natural gas
is primarily affected by the relative prices of the two products, and the cost
of replacing oil fired heating systems with one that uses natural gas. The
Company believes that approximately 1% of its customer base annually converts
from home heating oil to natural gas. Even when natural gas had a significant
price advantage over home heating oil, such as in 1980 and 1981 when there were
government controls on natural gas prices or during the Persian Gulf Crisis in
1990 and 1991, the Company's customers converted to natural gas at only a 2%
annual rate. During the latter part of 1991 and through 1995, natural gas
conversions have returned to their 1% historical annual rate as the prices for
the two products have been at parity.


         OIL PRICE VOLATILITY

         Although prices of energy sources have been volatile, historically,
this has not affected the performance of the Company because it has been able to
pass substantially all wholesale cost increases along to its customers. While
fluctuations in wholesale prices have not significantly affected demand to date,
it is possible that significant wholesale price increase could have the effect
of encouraging conservation of energy resources. If demand was reduced and the
Company was unable to increase its gross profit margin or reduce its operating
expenses, the effect of such decrease in demand would be a reduction of net
income.


         SEASONALITY

         The Company's business is directly related to the heating needs of its
customers. Accordingly, the weather can have a material effect on the Company's
sales in any particular year. Generally, however, the temperatures in the past
thirty years have been relatively stable, and as a result, have not had a
significant impact on the Company's performance, except on a short-term basis.
In 1997 "El Nino" caused one of the warmest winters on record which impacted
home heating oil sales during the 1997-1998 winter. Conversely, the winter of
2000-2001 was approximately 11% colder than normal, resulting in record revenues
for Able Energy.

         Approximately 70% of the Company's revenues are earned and received
from October through March, and the overwhelming majority of such revenues are
derived from the sale of home heating oil. During the spring and summer months,
revenues from the sale of diesel and gasoline fuels increase due to the
increased use of automobiles and construction apparatus.

         Each of the Company's divisions are seasonal. From May through
September, Able Oil experiences considerable reduction of retail heating oil
sales.

         Able Propane can experience up to 80% decrease in heating related
propane sales during the months of April to September, which is offset somewhat
by an increase of pool heating and cooking fuel.

         Over 90% of Able Melbourne's revenues are derived from the sale of
diesel fuel for construction vehicles, and commercial and recreational sea-going
vessels during Florida fishing season, which begins in April and ends in
November. Only a small percentage of Able Melbourne's revenues are derived from
the sale of home heating fuel. Most of these sales occur from December through
March, Florida's cooler months.

                                       5
<PAGE>

WHOLESALE SUPPLIERS

         The Company has three supply contracts for the purchase of Number 2
Heating Oil, representing 10% of the Company's annual heating fuel purchases.
The Company purchases its remaining fuel supplies on the spot market. The
Company satisfies its inventory requirements with nine different suppliers, the
majority of which have significant domestic fuel sources, and many of which have
been suppliers to the Company for over 5 years. The Company's current suppliers
are Ameranda Hess Corporation, Bayway Refining Co., Petron Oil Corporation, Star
Enterprises, Louis Dreyfus Energy, Koch Industries, Co., Valero Marketing and
Supply Co., and Sun Co., Inc. (R&M). The Company monitors the market each day
and determines when to purchase its oil inventory and from whom. As of June
1998, the Company began storing supplies of fuel equal to a month's sales of
fuel because of unusually low fuel prices.

         Two of these suppliers provided Able Oil with approximately 60% of its
heating oil requirements for the year ended December 31, 1998.

         Coastal Refining & Marketing, Inc., provided Able Melbourne with
approximately 99% of its diesel fuel product requirements for the year ended
December 31, 1998. Two major suppliers provided Able Melbourne with
approximately 67% and 33%, respectively, of its lubricant and related product
requirements for the year ended December 31, 1998. Two major suppliers,
Ferrellgas Partners, L.P. and Propane Power, provided Able Propane with
approximately 50% each, of its propane requirements for the year ended December
31, 1998.

         Management believes that if the Company's supply of any of the
foregoing products was interrupted, the Company would be able to secure adequate
supplies from other sources without a material disruption in its operations.
However, there can be no assurance that adequate supplies of such products will
be readily available in the future.


TRUCK PURCHASES AND MAINTENANCE

         The Company presently orders and purchases its fuel oil trucks from two
companies that manufacture trucks suitable for the Company's operations. The
Company has the option to purchase or lease standard equipment fuel trucks. The
typical configuration of the Company's fuel trucks is a Freightliner with a
3,000 gallon multi-compartment aluminum tank, a vapor recovery system and a
device that records fuel flow from the storage compartments. Each truck carries
the Company's registered logo emblazoned on its side.

         Service and environmental testing vehicles are standard commercial vans
which are obtained from a number of sources. These vehicles also carry the
Company logo.

         Generally, the Company relies upon equipment warranties, fixed fee
service contracts and on-site repairs for the maintenance of the Company's fleet
of vehicles. To date, the Company has not experienced significant downtime on
the any of its fuel trucks.


FRANCHISE DEVELOPMENT

         On December 31, 1999, the Company sold its Able Montgomery subsidiary
as a franchise operation. Able Montgomery located in Horsham, Pennsylvania, was
established in 1996 and is engaged in the retail sale and delivery of home
heating oil. Pursuant to a Stock Purchase Agreement, the Company sold all of the
outstanding shares of Able Montgomery held by the Company to an unaffiliated
third party for a purchase price of $140,000, and the purchaser agreed to enter
into a ten-year franchise agreement with the Company. As an incentive for the
purchaser to enter into the Stock Purchase Agreement and operate Able Montgomery
as a franchise, the Company agreed to waive the $25,000 franchise fee and the
$15,000 grand opening fee the Company typically charges new franchisees. At the
time of the sale, Able Montgomery represented approximately 1.52% of the total
assets of the Company and approximately 1.82% of the total revenues of the
Company.

         The purchaser of Able Montgomery issued to the Company a promissory
note for the purchase price of Able Montgomery. On June 15, 2000, the promissory
note was restructured to include the amount still due, plus an additional amount
for purchases of oil and advertising, for a total principal amount of $175,000.
Pursuant to the Stock Purchase Agreement, the Company agreed to indemnify the
purchaser in certain circumstances, which include, any personal injury or
property damage claims, or any environmental violation, caused by the Company
prior to the closing of the sale of Able Montgomery. The purchaser agreed to
indemnify the Company in certain circumstances, which include, the breach of any
representation or warranty made by purchaser in the Stock Purchase Agreement or
any of the other agreements executed by the purchaser in connection with the
sale of Able Montgomery. Additionally, pursuant to the Stock Purchase Agreement,
the purchaser agreed to enter into a Pledge and Security Agreement whereby the
purchaser agreed to pledge to the Company all of the assets and outstanding
shares of Able Montgomery, and grant to the Company a security interest in all
of the assets of Able Montgomery, pending the satisfaction of the promissory
note. The promissory note is payable 60 months from the date of the note and
accrues interest at a rate of 9.5% per annum, payable to the Company in monthly
installments.

                                       6
<PAGE>

         On June 27, 2000, the Company issued a franchise to an independent
third party for exclusive rights to operate our franchised business in the
Pocono Mountains, Pennsylvania. This franchise commenced business operations in
September 2000. In conjunction with issuance of the franchise, the franchisee
paid the company a non-refundable fee of $25,000, an advertising deposit of
$15,000 and a $5,000 escrow deposit. The Company will provide training,
advertising and use of Able credit for the purchase of product, among other
things, as specified in the agreement. The franchisee has an option to sell the
business back to the Company after two (2) years of operations pursuant to the
agreement.


1998 SALE OF A&O SUBSIDIARY

         A&O was established in 1995 and was engaged in the business of
environmental consulting and engineering. After assessing the potential
profitability of A&O versus its potential liabilities, Management determined
that it was in the Company's best interest to sell A&O. During the year ended
December 31, 1999, A&O experienced a loss from operations of approximately
$152,000 on revenues of $734,032. At December 31, 1999, A&O's liabilities were
approximately $374,712 as compared to assets of $221,000. From its inception
through year ended December 31, 1998, the Company, through Able Oil, advanced to
A&O approximately $128,442. Pursuant to a Stock Purchase Agreement dated
December 31, 1998, the Company sold all of the outstanding shares of common
stock of A&O held by the Company to Owl Environmental, Inc. ("Owl"), one of
A&O's subcontractors, for nominal consideration. Owl purchased such shares "as
is" without recourse or express or implied warranty from the Company.


PRODUCT LINES

         In fiscal year 2000, sales of home heating oil accounted for
approximately 62% of the Company's revenues. The remaining 38% of revenues were
from sales of gasoline, diesel fuel, kerosene, propane and related sales. The
Company also installs heating equipment and repairs such equipment on a 24
hours-a-day, seven days-a-week basis, generally within two hours of request.


INDUSTRY OVERVIEW

         The Company's business is highly competitive. In addition to
competition from alternative energy sources, the Company competes with
distributors offering a broad range of services and prices, from full service
distributors similar to the Company, to those offering delivery only.
Competition with other companies in the propane industry is based primarily on
customer service and price. Longstanding customer relationships are typical in
the retail home heating oil and propane industry. Many companies in the
industry, including the Company, deliver fuel oil or propane to their customers
based upon weather conditions and historical consumption patterns without the
customers having to make an affirmative purchase decision each time fuel oil or
propane is needed. In addition, most companies, including the Company, provide
equipment repair service on a 24 hour-a-day basis, which tends to build customer
loyalty. As a result, the Company may experience difficulty in acquiring new
retail customers due to existing relationships between potential customers and
other fuel oil or propane distributors.


MARKETING, SALES & STRATEGIC PARTNERSHIPS

         The Company employs a dynamic marketing strategy that the Company
believes has been the key to its success. The Company believes that it obtains
new customers and maintains existing customers by offering its full service home
energy products at discount prices, providing quick response refueling and
repair operations, providing automatic deliveries to customers by monitoring
historical use and weather patterns, and by providing customers a variety of
payment options. To expand its customer base and aggressively promote its
service, the Company engages in direct marketing campaigns, advertises regularly
and encourages referrals.

         The Company has successfully expanded its customer base by employing a
variety of direct marketing tactics, including telemarketing campaigns,
billboards, mass and direct mailings, and by distributing hand-bills and
promotional items, such as refrigerator magnets, sweatshirts and hats.
Additionally, the Company's delivery personnel are an integral part of the
Company's direct marketing activities. While in the field, drivers isolate
potential new customers by taking note of where the Company is not servicing
accounts, and act as salespersons for the Company. The Company offers its
drivers and customer care representatives an incentive payment of $20 for each
new automatic delivery customer and $10 for each conversion of an existing
customer to automatic delivery.

         The Company uses advertising campaigns to increase brand recognition
and expand its customer base, including radio and television advertisements,
billboards, and newsprint and telephone directory advertisements. Additionally,
the Company utilizes its fleet of fuel delivery trucks and service vans as
moving advertisements by emblazoning them with the Company's logo.

                                       7
<PAGE>

         Historically, referrals have been an important part of the Company's
efforts to expand its business and the Company offers incentives to customers
who refer business. Customers who refer business receive either $30 or 25
gallons of heating oil at no charge for each new customer referred. The Company
also offers other special limited time promotional offers to customers, designed
to increase business in specific targeted business segments. The Company also
encourages civic and religious organizations to refer business to the Company.
As an incentive, the Company pays such organizations a donation for each of its
members who become customers and a stipend based upon the members' fuel
consumption.


PATENTS AND TRADEMARKS

         Able Oil owns the exclusive right and license to use, and to license
others to use, the proprietary marks, including the service mark "Able Oil-
-Registered Trademark-" (and design) ("Proprietary Marks"). The "Able Oil-
-Registered Trademark-" service mark and design was registered under Classes 37
and 39 of the Principal Register of the U.S. Patent & Trademark Office ("USPTO")
on April 30, 1996 (registration No. 1,971,758). In addition, Able Oil
established certain common law rights to the Proprietary Marks through its
continuous, exclusive and extensive public use and advertising. The Proprietary
Marks are not registered in any state.

         Presently there is no effective determination by the USPTO, Trademark
Trial and Appeal Board, the trademark administrator of any state, or court
regarding the Proprietary Marks, nor is there any pending interference,
opposition or cancellation proceeding or any pending litigation involving the
Proprietary Marks or the trade names, logotypes, or other commercial symbols of
Able Oil. There are no agreements currently in effect that significantly limit
the rights of Able Oil to use or license the use of the Proprietary Marks.

         In December 2000, the Company was advised by the United States Patent
and Trademark Office that its applications for registration for the
"PriceEnergy.com" mark was assigned Serial No. 76/172083 and the
"PriceEnergy.com The Energy Hotspot" mark was assigned Serial No. 76/171829, as
of November 28, 2000.


ENVIRONMENTAL CONSIDERATIONS AND REGULATION

         The Company has implemented environmental programs and policies
designed to avoid potential liability under applicable environmental laws. The
Company has not incurred any significant environmental compliance cost, and
compliance with environmental regulations has not had a material effect on the
Company's operating or financial condition. This is primarily due to the
Company's general policies of closely monitoring its compliance with all
environmental laws. In the future, the Company does not expect environmental
compliance to have a material effect on its operations and financial condition.
The Company's policy for determining the timing and amount of any environmental
cost is to reflect an expense as and when the cost becomes probable and
reasonably capable of estimation.

         On July 6, 2000, Able Oil received approval from the New Jersey
Department of Environmental Protection a revised Discharge Prevention
Containment and Countermeasure plan ("DPCC") and Discharge, Cleanup and Removal
plan ("DCR") for the facility at 344 Route 46 East in Rockaway, New Jersey. This
plan has receive approval and will be in effect for three years. The State of
New Jersey requires companies which operate major fuel storage facilities to
prepare such plans, as proof that such companies are capable of, and have
planned for, an event that might be deemed by the State to be hazardous to the
environment. In addition to these plans, Able Oil has this facility monitored on
an ongoing basis to ensure that the facility meets or exceeds all standards
required by the State.

         The Company experienced no spill events that would warrant
investigation by state or other environmental regulatory agencies. All locations
are prepared to deal with such an event should one occur.


GOVERNMENT REGULATIONS

         Numerous federal, state and local laws, including those relating to
protection of the environment and worker safety, effect the Company's
operations. The transportation of fuel oil, diesel fuel, propane and gasoline is
subject to regulation by various federal, state and local agencies including the
U.S. Department of Transportation ("DOT"). These regulatory authorities have
broad powers, and the Company is subject to regulatory and legislative changes
that can effect the economies of the industry by requiring changes in operating
practices or influencing demand for, and the cost of providing, its services.

         The regulations provide that, among other things, the Company's drivers
must possess a commercial driver's licence with a hazardous materials
endorsement. The Company is also subject to the rules and regulations concerning
Hazardous Materials Transportation Act. For example, the Company's drivers and
their equipment must comply with the DOT's pre-trip inspection rules,
documentation regulations concerning hazardous materials (i.e. certificates of
shipments which describe the type, and amount of product transported), and
limitations on the amount of fuel transported, as well as driver "hours of
service" limitations. Additionally, the Company is subject to DOT inspections
that occur at random intervals. Any material violation of DOT rules or the
Hazardous

                                       8
<PAGE>

Materials Transportation Act may result in citations and/or fines upon the
Company. In addition, the Company depends upon the supply of petroleum products
from the oil and gas industry and, therefore, is affected by changing taxes,
price controls and other laws and regulations relating to the oil and gas
industry generally. The Company cannot determine the extent to which future
operations and earnings may be affected by new legislation, new regulations and
changes in existing regulations.

         The technical requirements of these laws and regulations are becoming
increasingly expensive, complex and stringent. These laws may impose penalties
or sanctions for damages to natural resources or threats to public health and
safety. Such laws and regulations may also expose the Company to liability for
the conduct or conditions caused by others, or for acts of the Company that were
in compliance with all applicable laws at the time such acts were performed.
Sanctions for noncompliance may include revocation of permits, corrective action
orders, administrative or civil penalties and criminal prosecution. Certain
environmental laws provide for joint and several liabilities for remediation of
spills and releases of hazardous substances. In addition, companies may be
subject to claims alleging personal injury or property damages as a result of
alleged exposure to hazardous substances, as well as damage to natural
resources.

         Although the Company believes that it is in compliance with existing
laws and regulations and carries adequate insurance coverage for environmental
and other liabilities, there can be no assurance that substantial costs for
compliance will not be incurred in the future or that the insurance coverage in
place will be adequate to cover future liabilities. There could be an adverse
affect upon the Company's operations if there were any substantial violations of
these rules and regulations. Moreover, it is possible that other developments,
such as more stringent environmental laws, regulations and enforcement policies
thereunder, could result in additional, presently unquantifiable, costs or
liabilities to the Company.


EMPLOYEES

         As of June 30, 2001, the Company employed approximately 67 individuals.
From October through March, the Company's peak season, the Company employs
approximately 100 persons. From April through September, the Company employs
approximately 65 persons. Currently, there are no organized labor unions
representing any of the employees of Company or any of its related companies.


ITEM 2.       DESCRIPTION OF PROPERTY

         The Company's corporate headquarters are located in a 9,800 square foot
facility in Rockaway, New Jersey. This facility accommodates the Company's
corporate, administrative, marketing and sales personnel. The lease expires July
31, 2005 and carries an annual rent increasing from $109,000 to $290,000 over
the term of the lease. The Company owns the property located at 344 Route 46 in
Rockaway, New Jersey. This facility accomodates the Company's fuel terminal,
including fuel storage tanks, truck yard space and dispatch operations. The
Company purchased the property in August 1999, through a newly formed
wholly-owned subsidiary, Able Energy Terminal, LLC, at a purchase price of
$1,150,000. The Company also owns two buildings, totaling 4,512 square feet,
consisting of wood frame facilities located at 38 Diller Avenue, Newton, New
Jersey that serves as a supply depot, storage area administrative offices and
service facility.

         The Company also leased an additional facility on Route 46 in Rockaway,
New Jersey. The lease has a term of one year from September 1, 1999 to August
31, 2000. The rent was $1,300 per month, $15,600 for the year, plus 10% of the
increase in real estate taxes over the base year, 1999. The Company had the
option to renew for five additional one-year terms. The Company vacated this
leased facility in October 2000.

         Able Melbourne leases a 4,000 square foot concrete and aluminum
facility that serves as a storage facility, a service facility and
administrative offices, located at 757 Scallop Drive, Port Canaveral, Florida
and is governed by an oral, month-to-month lease with annual rent of $6,000. The
Company does not store fuel oil at this location with the exception of that
which is kept in the delivery trucks. This facility is conveniently located
within three miles of its wholesale supplier. The Company is responsible for
maintaining the facilities in compliance with all environmental rules and laws.

                                       9
<PAGE>

ITEM 3.       LEGAL PROCEEDINGS

         In accordance with the purchase of the property on Route 46, Rockaway,
New Jersey by Able Energy Terminal, LLC, the Company intends to pursue recovery
of all costs and damages related to a lawsuit by the seller against a former
tenant of the property, based on environmental cleanup costs on the property.
Purchaser will assume all responsibility and direction for the lawsuit, subject
to the sharing of half of any recoveries from the lawsuit with the seller. The
seller by reduction of its mortgage will pay costs related to the above up to
$250,000. The Company believes that the claims against the former tenant are
meritorious and intends to vigorously pursue its claims.

         Price Energy has commenced suit against ThinkSpark Corporation based on
claims of breach of a Consulting Services Agreement, dated June 2, 2000. Under
the agreement, ThinkSpark was to develop, deliver and install a data processing
software system to be operational by mid-August 2000. ThinkSpark ceased work in
mid-October 2000, prior to completion of the project, and Price Energy hired
another firm to continue the project. ThinkSpark has filed a counterclaim
seeking payment of $283,100.62, which is the total amount of bills rendered. The
Company believes that its claims against ThinkSpark are meritorious and intends
to vigorously pursue its them.

         Except as noted above, the Company is not currently involved in any
legal proceeding that could have a material adverse effect on the results of
operations or the financial condition of the Company. From time to time, the
Company may become a party to litigation incidental to its business. There can
be no assurance that any future legal proceedings will not have a material
adverse affect on the Company.


ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

                                       10
<PAGE>



                                     PART II
                                     -------

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET FOR SECURITIES

              The Company's Common Stock commenced trading on the Nasdaq
SmallCap Market under the symbol "ABLE" on June 29, 1999. The following table
sets forth the high and low sale price of the Common Stock on a quarterly basis,
as reported by Nasdaq:


                  QUARTER ENDED                  HIGH PRICE ($)    LOW PRICE ($)
                  --------------------------------------------------------------

                  June 30, 1999 *                    8                7 1/16
                  September 30, 1999                 7.75             6
                  December 31, 1999                  7.125            5.25
                  March 31, 2000                     7                5
                  June 30, 2000                      6                4.25
                  September 30, 2000                 5.25             3
                  December 31, 2000                  4                1.625
                  March 31, 2001                     3 9/16           2
                  June 30, 2001                      6.75             2.35

                * The Company's Common Stock began trading on June 29, 1999.

              At March 24, 2000, there were approximately 600 holders of record
of the Company's Common Stock. The Company has not paid dividends on its shares
of Common Stock outstanding in the past. There are no restrictions that limit
the ability of the Company to pay dividends or are likely to do so in the
future.


RECENT SALE OF UNREGISTERED SECURITIES

         None.


ITEM 6.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

              Statements in this Annual Report on Form 10-KSB concerning the
Company's outlook or future economic performance, anticipated profitability,
gross billings, expenses or other financial items, and statements concerning
assumption made or exceptions to any future events, conditions, performance or
other matter are "forward looking statements," as that term is defined under the
Federal Securities Laws. Forward-looking statements are subject to risks,
uncertainties, and other factors which would cause actual results to differ
materially from those stated in such statements. Such risks, and uncertainties
and factors include, but are not limited to: (i) changes in external competitive
market factors or trends in the Company's results of operation; (ii)
unanticipated working capital or other cash requirements and (iii) changes in
the Company's business strategy or an inability to execute its competitive
factors that may prevent the Company from competing successfully in the
marketplace.

REVENUE RECOGNITION

              Sales of fuel and heating equipment are recognized at the time of
delivery to the customer, and sales of equipment are recognized at the time of
installation. Revenue from repairs and maintenance service is recognized upon
completion of the service. Payments received from customers for heating
equipment service contracts are deferred and amortized into income over the term
of the respective service contracts, on a straight line basis, which generally
does not exceed one year.

                                       11
<PAGE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2001, COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 2000.

              The Company reported revenues of $5,551,336 for the three months
ended June 30, 2001, an increase of 14.42% over the prior year's revenues of
$4,851,781 for the same three month period. This is attributable to an increased
customer base, which resulted in higher service revenue including sales of new
equipment and increased sales of most of the Company's products. Increased
revenues is also attributable to the Company's increased marketing efforts.

              Gross profit margin, as a percentage of revenues, for the three
months ended June 30, 2001, was 16.50% of net revenues, representing a small
decrease when compared to the margin of 17.44% for the same quarter a year ago.
The decrease in margin is primarily a result of price fluctuations of home
heating oil creating less control of cost/price relationship.

              Selling, General and Administrative expenses increased by $402,352
from $1,110,955 for the three months ended June 30, 2000 to $1,513,307 for the
three months ended June 30, 2001. This increase was attributable to the
operations of a new subsidiary, PriceEnergy.Com, Inc., which began operations in
October 2000 and had costs of $374,815 in the current quarter.

              Operating Loss for the three months ended June 30, 2001 was
$899,885, an increase over the Company's operating loss of $433,289 for the
three months ended June 30, 2000. This increase in operating loss was directly
attributable to the loss incurred by the new subsidiary, PriceEnergy.Com, Inc.,
which was $493,330. Some increase in the operating loss was also due to
additional staff which was carried over from the winter months and decrease in
gross profit due to unstable market price for products which the Company sells.

              Net Loss for the three months ended June 30, 2001 increased by
$665,694 to $901,910 when compared to the previous year. This increase in net
loss was due to the loss in a new subsidiary, PriceEnergy.Com, Inc. of $493,330,
additional marketing and increased operating expenses with concentration on
growth.

SIX MONTHS ENDED JUNE 30, 2001, COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2000.

              The Company reported revenues of $18,189,597 for the six months
ended June 30, 2001, an increase of 13.92% over the prior year's revenues of
$15,966,984 for the same six month period. This is attributable to increased
sales as a result of a larger customer base in the Company service area, colder
weather during this period, and an increase in the price of products sold by the
Company above the price of the prior year. Increased revenues are also the
product of the Company's increased marketing efforts

              Gross profit margin, as a percentage of revenues, for the six
months ended June 30, 2001 was 16.94% of net revenues, representing a decrease
over a margin of 18.31% for the same six month period one year ago. The
reduction in margin is primarily a result of unstable retail prices for home
heating oil caused by unstable product cost.

              Selling, General and Administrative expenses increased by
$1,212,575 from $1,995,190 for the six months ended June 30, 2000 to $3,207,765
for the six months ended June 30, 2001. These expenses are attributable to the
loss incurred by the new subsidiary, PriceEnergy.Com, Inc. of $533,728, and also
an increase in the size of general operations of the Company, and an increase in
marketing, wages and benefits.

              Operating Loss for the six months ended June 30, 2001 was
$717,763, as compared to operating income of $590,676 for the six months ended
June 30, 2000. This operating loss was attributable to lower gross margin caused
by unstable prices for home heating oil, loss in the new subsidiary,
PriceEnergy.Com, Inc. of $782,304, and increased insurance, labor cost and
benefits.

                                       12
<PAGE>

              The Company had a net profit of $57,081 for the six months ended
June 30, 2001, without the new start-up venture, PriceEnergy.Com, Inc. Net loss
for the six months ended June 30, 2001 of $725,223 as compared to net income of
$475,005 in the same period in the previous year. This net loss was attributable
to a loss in the new subsidiary, PriceEnergy.Com, Inc., lower gross margins and
higher operating expenses of a larger organization and new facility.

              Depreciation and amortization expense for the six months ended
June 30, 2001 was $591,397, an increase of $253,297 over the six months ended
June 30, 2000. Amortization relates to the amortization of customer lists, being
amortized over 15 years and two Non-Compete Agreements amortized over 5 years ,
per the agreements. The increased depreciation relates to the purchase of
additional trucks and other equipment in 2000 and amortization of the
PriceEnergy.Com Web Site of $210,821.

              The Company's subsidiaries, Able Oil Company and Able Propane,
LLC, showed profits of $179,197 and $254,474, respectively, for the six months
ended June 30, 2001. These two subsidiaries accounted for the majority of the
revenue for the corporation. Growth in the Able Propane, LLC subsidiary has been
significant each year since its inception in 1996. This subsidiary had internal
growth of 28.4% in revenues during the last full calendar year. This rate of
growth is expected to continue.

              Interest expense for the six months ended June 30, 2001 was
$130,609 as compared to $98,100 for the six months ended June 30, 2000. This
increase was due to debt incurred in connection with the purchase of additional
trucks and other equipment.

LIQUIDITY AND CAPITAL RESOURCES

              For the six months ended June 30, 2001, compared to the six months
ended June 30, 2000, the Company's cash position decreased by $777,962 from
$2,266,980 to $1,489,018. For the year ended December 31, 2000, cash was
generated through operations, collections of customer advance payments, and
increase in the Line of Credit borrowing. The primary reason for reduction in
cash was a loan and investment in PriceEnergy.Com, Inc. There was an additional
advance of approximately $191,000 in the six months ended June 30, 2001.

              The Company is currently pursuing additional bank borrowings, debt
placements and equity offerings. This will enable the Company to continue to
grow while strengthening its infrastructures. The Company has entered into an
agreement with PricewaterhouseCoopers Securities, LLC to assist the Company in
raising debt or equity funds up to $15 million.

              The Company has received a Term Letter, dated September 25, 2001,
from Fleet National Bank. The Bank has proposed to provide the Company a credit
facility of $1,500,000. The Bank has also approved a maximum of $1,000,000 in
standby letters of credit listing the Borrower's major suppliers as the
beneficiary which is available to the Company on an as needed basis. The Company
and the bank are currently finalizing the loan documents.

SEASONALITY

              The Company's operations are subject to seasonal fluctuations,
with a majority of the Company's business occurring in the late fall and winter
months. Approximately 70% of the Company's revenues are earned and received from
October through March, with most of such revenues derived from the sale of home
heating products, including propane gas and fuel oil. However, the seasonality
of the Company's business is offset, in part, by an increase in revenues from
the sale of HVAC products and services, diesel and gasoline fuels during the
spring and summer months, due to the increased use of automobiles and
construction apparatus.

                                       13
<PAGE>

              From May through September, Able Oil can experience considerable
reduction of retail heating oil sales. Similarly, Able Propane can experience up
to 80% decrease in heating related propane sales during the months of April to
September, this is offset somewhat by increased sales of propane gas used for
pool heating and fuel for outdoor cooking equipment.

              Over 90% of Able Melbourne's revenues are derived from the sale of
diesel fuel for construction vehicles, and commercial and recreational sea-going
vessels during Florida's fishing season which begins in April and ends in
November. Only a small percentage of Able Melbourne's revenues are derived from
the sale of home heating fuel. Most of these sales occur from December through
March, Florida's cooler months.

ITEM 7.       FINANCIAL STATEMENTS

              All financial information required by this Item is attached hereto
beginning on Page F-1.



ITEM 8.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

         None.



                                       14
<PAGE>

                                    PART III
                                    --------

ITEM 9.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
                                     The directors and executive officers of the Company are as follows:

--------------------------------------------------- ------------- ---------------------------------------------------------------

NAME                                                    Age       Position
-----
--------------------------------------------------- ------------- ---------------------------------------------------------------
<S>                                                     <C>       <C>
Timothy Harrington                                       33       Chief Executive Officer, Chairman of the Board and Secretary
--------------------------------------------------- ------------- ---------------------------------------------------------------
Christopher P. Westad                                    47       President, Chief Financial Officer and Director
--------------------------------------------------- ------------- ---------------------------------------------------------------
James Purcaro                                            39       Director
--------------------------------------------------- ------------- ---------------------------------------------------------------
Gregory Sichenzia                                        39       Director
--------------------------------------------------- ------------- ---------------------------------------------------------------
Patrick O'Neill                                          41       Director
--------------------------------------------------- ------------- ---------------------------------------------------------------
Edward C. Miller, Jr.                                    33       Director
--------------------------------------------------- ------------- ---------------------------------------------------------------
</TABLE>

         Set forth below is a brief background of the executive officers and
directors of the Company, based on information supplied by them.

         TIMOTHY HARRINGTON, serves as the Company's Chief Executive Officer,
Chairman of the Board, and Secretary. In 1989, Mr. Harrington founded Able Oil
Company, Inc., and since that time, has served as Able Oil's President, Chief
Executive Officer and Chairman of the Board. Mr. Harrington has also served as
the Chief Executive Officer and Chairman of the Board of Directors of Able
Energy, Able Melbourne and Able Propane since their respective inception.

         CHRISTOPHER P. WESTAD, serves as the President, Chief Financial Officer
and a Director of the Company. Since September 1996, Mr. Westad has served as
the President of Able Energy and Able Propane. From 1991 through 1996, Mr.
Westad was a Market Manager and Area Manager for Ferrellgas Partners, L.P., a
company engaged in the retail distribution of liquefied petroleum gas. From 1977
through 1991, Mr. Westad served in a number of management positions with RJR
Nabisco. In 1975, Mr. Westad received a Bachelor of Arts in Business and Public
Management from Long Island University--Southampton, New York.

         JAMES PURCARO, has served as a director to the Company since September
1996. Since 1986, Mr. Purcaro has served as the president and chief executive
officer of Kingsland Trade Print Group, Inc., a commercial printing company.

         GREGORY SICHENZIA, has served as a director to the Company since August
1999. Mr. Sichenzia is a partner of the law firm of Sichenzia, Ross & Friedman
LLP in New York, New York and has been since May 1998. Prior to that he had been
a partner of Singer Zamansky LLP in New York, New York, since November 1996.
Prior to that he had been an associate attorney at Schneck Waeltman Hashmall &
Mischel LLP in New York City, since 1994.

         PATRICK O'NEILL, has served as a director to the Company since August
1999. Mr. O'Neill has served as the President of Fenix Investment and
Development, Inc., a real estate company based in Parsippany, New Jersey for the
past five years. Prior to this, Mr. O'Neill served as Vice President of Business
Development for AvisAmerica, a Pennsylvania based home manufacturer. Mr. O'Neill
holds a B.S. from the United States Military Academy, and has been awarded the
Army Achievement Medal for his work with the Army Corps of Engineers.

         EDWARD C. MILLER, JR., has served as a director to the Company since
February 2000. Mr. Miller has served as the Director of Marketing for the law
firm of Norris, McLaughlin & Marcus, P.A., located in Somerville, New Jersey
since September 1999. Prior to that, Mr. Miller served as Practice Development
Coordinator at the law firm of Riker, Danzig, Scherer, Hyland & Perretti, LLP
since May 1991. Mr. Miller holds a B.S. in Marketing Management from Syracuse
University School of Management.

Committees of the Board of Directors

         The Board of Directors has established a Compensation Committee and an
Audit Committee consisting of at


                                       15
<PAGE>

least two directors who are not salaried officers of the Company.

         The purpose of the Compensation Committee is to review the Company's
compensation of its executives, to make determinations relative thereto and to
submit recommendations to the Board of Directors with respect thereto. The
Compensation Committee also selects the persons to whom options to purchase
shares of the Company's Common Stock under the 1999 Stock Option Plan will be
granted and to make various other determinations with respect to such Plan.

         The purpose of the Audit Committee is to provide general oversight of
audit, legal compliance and potential conflict of interest matters.


Compensation of Directors

         The Company has not paid compensation to any director for acting in
such capacity. The Company is currently reviewing its policy on compensation of
outside directors and may pay outside directors in the future.

              Directors serve until the next annual meeting of stockholders or
until their successors are elected and qualified. Officers serve at the
discretion of the Board of Directors. Directors are reimbursed for travel
expenses.

Section 16(a) Beneficial Ownership Reporting Compliance

         Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to the Company during fiscal year 1999, the Company is not aware of
any director, officer or beneficial owner of more than ten percent of the
Company's Common Stock that failed to file reports required by Section 16(a) of
the Securities Exchange Act of 1934 on a timely basis during fiscal year 2001.



ITEM 10.      EXECUTIVE COMPENSATION

         The following table sets forth certain summary information with respect
to the compensation paid to the Company's Chief Executive Officer and President
for services rendered in all capacities to the Company for the fiscal period
ended June 30, 2001. Other than as listed below, the Company had no executive
officers whose total annual salary and bonus exceeded $100,000 for that fiscal
year:

<TABLE>
<CAPTION>
-------------------------------------------------------------------- -----------------------------------------------
                        ANNUAL COMPENSATION                                      LONG-TERM COMPENSATION
                        -------------------                                      ----------------------
                                                                     ------------------------- ---------------------
                                                                              Awards                 Payouts
------------------- --------- ------------ ---------- -------------- ------------ ------------ ---------- ----------
     Name and         Year    Salary ($)   Bonus ($)  Other Annual   Restricted   Securities   LTIP       All
     Principal                                        Compensation   Stock Award  Underlying   Payouts    Other
     Position                                              ($)                     Options /      ($)     Compen-sation
                                                                                   SARs (#)                  ($)
------------------- --------- ------------ ---------- -------------- ------------ ------------ ---------- ----------
<S>                  <C>       <C>          <C>        <C>              <C>         <C>          <C>       <C>
Timothy               2001      105,747        -               -          -            -           -          -
Harrington, Chief
Executive Officer
------------------- --------- ------------ ---------- -------------- ------------ ------------ ---------- ----------
Christopher P.        2001      242,558        -            -             -            -           -          -
Westad, President
------------------- --------- ------------ ---------- -------------- ------------ ------------ ---------- ----------
                                                  ---------------
</TABLE>

                                       16
<PAGE>

         No option grants were made to named executive officers during fiscal
year ended June 30, 2001.

     No named executive held unexercised options as at June 30, 2001.


EMPLOYMENT ARRANGEMENTS

         Timothy Harrington and Christopher P. Westad have three year employment
agreements with the Company. Timothy Harrington is retained as Chief Executive
Officer of the Company at an annual salary of $225,000. Christopher Westad is
retained as President of the Company at an annual salary of $100,000. Each of
the Messrs. Harrington and Westad are entitled to bonuses pursuant to their
employment agreements if the Company meets certain financial targets based on
sales, profitability and good management goals as predetermined by the Board of
Directors or compensation committee and other subjective criteria as determined
by the Board of Directors or compensation committee. Such bonuses, plus all
other bonuses payable to the executive management of the Company, shall not
exceed in the aggregate, a "bonus pool" which shall equal up to 5% of the
Company's earnings before taxes, depreciation and amortization ("EBITDA") for
1999, provided the Company achieves at least $800,000 in EBITDA, 10% of EBITDA
for 2,000 and 2001, provided the Company achieves at least $3,000,000 and
$5,000,000, respectively, of EBITDA in each of such years. The employment
agreements also provide for reimbursement of reasonable business expenses.
Timothy Harrington also receive additional compensation including Company
automobile, insurance and retirement savings matched contributions by the
Company and such other perquisites as are customary. The employment agreements
for each of Messrs. Harrington and Westad contain a covenant not to compete
whereby Messrs. Harrington and Westad agree, for the term of the employment
agreements and until one year following the termination of the agreements, not
to (i) persuade any customer of the Company to cease or reduce the amount of
business it does with the Company; (ii) solicit the Company's customers for
their own benefit; or (iii) persuade any of the Company's employees to leave the
employ of the Company.

         In the event that there is a change in control of the Company, through
an acquisition where any person acquires more than 50% of the shares of the
Company, a consolidation or merger with another corporation resulting in at
least 50% of the voting shares of the surviving corporation being controlled by
a new acquirer or the sale directly or otherwise of all of the assets of the
Company to a third party in a non-distress situation, then the Company shall pay
to Timothy Harrington a lump sum payment equal to one year's salary.


EMPLOYEE BONUS POOL

         The Company has adopted an Employee Bonus Pool, pursuant to which
Management may, at its own discretion, award employees for exemplary
performance. The Company has allocated $25,000, $40,000 and $50,000 for the
years 1999, 2000 and 2001, respectively, for such purposes. Management may not,
however, award employees bonuses from the Employee Bonus Pool (i) if such
bonuses would result in negative earning before taxes for the year in which such
bonuses are to be granted, or (ii) if the Company does not have net profits in
such year.


EMPLOYEE STOCK OPTION PLAN

         The Company has adopted a Stock Option Plan (the "1999 Plan"), pursuant
to which 300,000 shares of Common Stock are reserved for issuance.

         The 1999 Plan is administered by the board of directors, or by a
committee with at least two directors as delegated by the board of directors who
determine among other things, those individuals who shall receive options, the
time period during which the options may be partially or fully exercised, the
number of shares of Common Stock issuable upon the exercise of the options and
the option exercise price.

         The 1999 Plan's duration is for a period of ten years. Options under
the 1999 Plan must be issued within ten years from the effective date of the
1999 Plan. Options may be granted to officers, directors, consultants, key
employees, advisors and similar parties who provide their skills and expertise
to the Company. Options granted under the 1999 Plan may be exercisable for up to
ten years, may require vesting, and shall be at an exercise price all as
determined by the board. Options will be non-transferable except to an option
holder's personal holding company or registered retirement savings plan and
except by the laws of descent and distribution or a change in control of the
Company, as defined in the 1999 Plan, and are exercisable only by the
participant during his or her lifetime. Change in control includes (i) the sale
of substantially all of the assets of the Company and merger or consolidation
with another, or (ii) a majority of the board changes other than by election by
the shareholders pursuant to board solicitation or by vacancies filled by the
board caused by death or resignation of such person.

         If a participant ceases affiliation with the Company by reason of
death, permanent disability or the retirement of an

                                       17
<PAGE>

Optionee either pursuant to a pension or retirement plan adopted by the Company
or on the normal retirement date prescribed from time to time by the Company,
the option remains exercisable for three months from such occurrence but not
beyond the option's expiration date. Other termination gives the participant
three months to exercise, except for termination for cause which results in
immediate termination of the option.

         Options granted under the 1999 Plan, at the discretion of the
compensation committee or the board, may be exercised either with cash, by
certified check or bank cashier's check, Common Stock having a fair market equal
to the cash exercise price, the participant's promissory note, or with an
assignment to the Company of sufficient proceeds from the sale of the Common
Stock acquired upon exercise of the Options with an authorization to the broker
or selling agent to pay that amount to the Company, or any combination of the
above.

         The exercise price of an option may not be less than the fair market
value per share of Common Stock on the date that the option is granted in order
to receive certain tax benefits under the Income Tax Act of United States (the
"ITA"). The exercise price of all future options will be at least 100% of the
fair market value of the Common Stock on the date of grant of the options. A
benefit equal to the amount by which the fair market value of the shares at the
time the employee acquires them exceeds the total of the amount paid for the
shares or the amount paid for the right to acquire the shares shall be deemed to
be received by the employee in the year the shares are acquired pursuant to
paragraph 7(1) of the ITA. Where the exercise price of the option is equal to
the fair market value of the shares at the time the option is granted, paragraph
110(1)(d) of the ITA allows a deduction from income equal to one quarter of the
benefit as calculated above. If the exercise price of the option is less than
the fair market value at the time it is granted, no deduction under paragraph
110(1)(d) is permitted. Options granted to any non-employees, whether directors
or consultants or otherwise will confer a tax benefit in contemplation of the
person becoming a shareholder pursuant to subsection 15(1) of the ITA.

         Any unexercised options that expire or that terminate upon an
employee's ceasing to be employed by the Company become available again for
issuance under the 1999 Plan.

         The 1999 Plan may be terminated or amended at any time by the board of
directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the 1999 Plan may not be
increased without the consent of the shareholders of the Company.


ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of June 30, 2001, certain
information concerning beneficial ownership of shares of Common Stock with
respect to (i) each person known to the Company to own 5% or more of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii) the
executive officers of the Company, and (iv) all directors and officers of the
Company as a group:

<TABLE>
<CAPTION>
         --------------------------------- ------------------------ -------------------------
                                              NUMBER OF SHARES           APPROXIMATE
                                                BENEFICIALLY             PERCENTAGE OF
         NAME*                                      OWNED                COMMON STOCK**
         -----                                      -----                --------------
         --------------------------------- ------------------------ -------------------------
<S>                                                      <C>                  <C>
         Timothy Harrington                              1,000,000            50%
         --------------------------------- ------------------------ -------------------------
         Christopher Westad                                     --             --
         --------------------------------- ------------------------ -------------------------
         All Officers and Directors as a                 1,000,000            50%
         Group (2 persons)
         --------------------------------- ------------------------ -------------------------
                                                ------------------
</TABLE>

*     Except as noted above, the address for the above identified officers and
      directors of the Company is c/o Able Energy, Inc., 198 Green Pond Road,
      Rockaway, New Jersey 7866.

**    Percentages are based upon the assumption that the shareholder has
      exercised all of the currently exercisable options he or she owns which
      are currently exercisable or exercisable within 60 days and that no other
      shareholder has exercised any options he or she owns.

                                       18
<PAGE>

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         From time to time, our majority-owned subsidiary Price Energy has
borrowed money from us. As of June 30, 2001, the aggregate indebtedness to us
was a promissory note made on November 1, 2000 for $1,350,000. This note bears
interest at a rate of 8% per annum payable quarterly with principal payments
beginning on November 1, 2002. Able Energy, Inc. own approximately 70.6% of
Price Energy, Timothy Harrington, our Chief Executive Officer, owns 23.5%, and
Christopher Westad, our President, owns 3.6%.



ITEM 13.   EXHIBITS, LIST AND REPORTS ON FORM 8-K

         The Company has not filed any reports on Form 8-K during the last
quarter of the period covered by this report.

EXHIBITS

         The following Exhibits are filed as part of this Report:

       Exhibit
       Number              Description
       -------             -----------
         3.1               Articles of Incorporation of Registrant*
         3.2               By-Laws of Registrant*

         4.1               Specimen Common Stock Certificate*

         5.1               Opinion of Sichenzia, Ross & Friedman LLP***

         10.1              Form of Consulting Agreement with the Walsh Manning
                           Securities, LLC***

         10.2              1999 Stock Option Plan***

         10.3              Lease of Company's Facility at 344 Route 46,
                           Rockaway, New Jersey*

         10.4              Form  of employment agreement between the Company and
                           Timothy Harrington, to be executed on or before the
                           Effective Date***

         10.5              Form of employment agreement between the Company and
                           Christopher P. Wested, to be executed on or before
                           the Effective Date***

         10.6              $600,000 Revolving Credit Facility and $350,000 Line
                           of Credit with PNC Bank, National Association dated
                           October 23, 1996, and amendment thereto, dated
                           June 12, 1998, extending the Line of Credit to
                           $500,000*

         10.7              $675,000 Term Loan Agreement dated June 11, 1998 by
                           and between the Company and PNC Bank, National
                           Association and exhibits thereto, including Pledge
                           Agreement by and between Timothy Harrington and PNC
                           Bank, Guaranty and Suretyship Agreement by and
                           between the Company and PNC Bank, and Pledge
                           Agreement by and between the Company and PNC Bank*

         10.8              Marketing Alliance Agreement, dated March 1, 1998,
                           between the Company and AllEnergy Marketing Company,
                           L.L.C., wherby the Company obtained the exclusive
                           right to market natural gas supplied by AllEnergy in
                           specified areas**

         10.9              In tank agreement between the Company and Mieco,
                           Inc., dated May 11, 1998, for the storage of the
                           Mieco's petroleum products in the Company's tank
                           facilities**

         10.10             Form of Company's Pre-Purchase Enrollment Form*

         10.11             Oil Supply Agreement between the Company and Mieco,
                           Inc., dated May 19, 1998**

         10.12             Letter agreement, dated July 3, 1998, between the
                           Company and Mieco, Inc. modifying the Oil Supply
                           Agreement, dated May 19, 1998, whereby the Company
                           agreed to increase the amount of oil purchased from
                           Mieco**

         10.13             Oil Supply Agreement between the Company and Amarada
                           Hess Corporation, dated July 30, 1998**

                                       19
<PAGE>

         10.14             Oil Supply Agreement between the Company and Bayway
                           (TOSCO) Refining Company, dated March 27, 1998**

         10.15             Oil Supply Agreement between the Company and Koch
                           Refining Company, L.P., dated March 17, 1998**

         10.16             Fuel Purchase Agreement (Natural Gas) between the
                           Company and Ferrellgas, dated September 3, 1996**

         10.17             Fuel Purchase Agreement (Propane) between the Company
                           and Keystone Propane Service, Inc., dated July 28,
                           1998**

         10.18             Lease between the Company and Summit Leasing
                           Corporation ("Summit"), dated December 3, 1997**

         10.19             Franchise Agreement, dated December 31, 1998, between
                           the Company and Andrew Schmidt regarding sale of Able
                           Oil Company Montgomery, Inc. as a franchise***

         10.20             Stock Purchase Agreement, dated December 31, 1998,
                           between the Company and Andrew Schmidt regarding the
                           sale of stock of Able Oil Company Montgomery, Inc. by
                           the Company to Mr. Schmidt***

         10.21             Pledge and Security Agreement, dated December 31,
                           1998, between the Company and Andrew Schmidt
                           regarding the pledge of stock of Able Oil Company
                           Montgomery, Inc.***

         10.22             $140,000 principal amount, 9.5% Promissory Note,
                           dated December 31, 1998, between the Company and
                           Andrew Schmidt regarding the sale of stock of Able
                           Oil Company Montgomery, Inc. by the Company to Mr.
                           Schmidt*****

         10.23             Stock Sale Agreement, dated December 31, 1998,
                           between the Company and Owl Environmental, Inc.
                           regarding the sale of stock of A&O Environmental
                           Services, Inc. by the Company to Owl Environmental,
                           Inc.*

         21.1              List of Subsidiaries of Registrant*


--------------

(*)      Reference is made to the Company's Registration Statement, filing
         Number 333-51909, filed with the SEC on July 15, 1998.

(**)     Reference is made to the Company's Registration Statement, filing
         Number 333-51909, filed with the SEC on November 6, 1998.

(***)    Reference is made to the Company's Registration Statement, filing
         Number 333-51909, filed with the SEC on April 15, 1999.

(****)   Reference is made to the Company's Registration Statement, filing
         Number 333-51909, filed with the SEC on May 17, 1999.

(*****)  Reference is made to the Company's Form 10-KSB, filing number 333-51909
         For the year ended December 31, 2000.

                                       20
<PAGE>




                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on this 28th day of September, 2001.


                                                ABLE ENERGY, INC.


                                                /s/ Timothy Harrington
                                                --------------------------------
                                                Timothy Harrington,
                                                Chief Executive Officer

                                                /s/ Christopher P. Westad
                                                --------------------------------
                                                Christopher P. Westad, President

                                                /s/ James Purcaro
                                                --------------------------------
                                                James Purcaro, Director

                                                /s/ Gregory Sichenzia
                                                --------------------------------
                                                Gregory Sichenzia, Director

                                                /s/ Patrick O'Neill
                                                --------------------------------
                                                Patrick O'Neill,
                                                Director

                                                /s/ Edward C. Miller, Jr.
                                                --------------------------------
                                                Edward C. Miller, Jr., Director

                                       21
<PAGE>

                                ABLE ENERGY, INC.
                               -------------------

                             JUNE 30, 2001 AND 2000
                             -----------------------




                                 C O N T E N T S
                                 ---------------

                                                                          PAGE
                                                                          -----
CONSOLIDATED FINANCIAL STATEMENTS:

         ACCOUNTANTS' REPORT                                                 F-2

         CONSOLIDATED BALANCE SHEET                                    F-3 - F-4

         CONSOLIDATED STATEMENT OF OPERATIONS                                F-5

         CONSOLIDATED STATEMENT OF CHANGES
            IN STOCKHOLDERS' EQUITY                                          F-6

         CONSOLIDATED STATEMENT OF CASH FLOWS                                F-7

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                   F-8 - F-27











                                       F-1
<PAGE>

TO THE BOARD OF DIRECTORS
ABLE ENERGY, INC.
ROCKAWAY, NEW JERSEY  07866


                          INDEPENDENT AUDITOR'S REPORT
                         ------------------------------

We have audited the accompanying consolidated balance sheet of Able Energy, Inc.
and subsidiaries as of June 30, 2001 and the related consolidated statements of
operations, changes in Stockholders' equity, and cash flows for the six months
ended June 30, 2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, based on our audit the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of Able Energy, Inc. and subsidiaries as of June 30, 2001, and the
results of their operations and their cash flows for the six months ended June
30, 2001 in conformity with accounting principles generally accepted in the
United States of America.

We have previously reviewed, in accordance with the standards established by the
American Institute of Certified Public Accountants, the consolidated statements
of income and cash flows for the six months ended June 30, 2000. We did not
express an opinion on these consolidated financial statements and are not aware
of any material modification that should be made to these consolidated financial
statements for them to be in conformity generally accepted accounting
principles.



Rockaway, New Jersey
September 25, 2001





                                       F-2
                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       -----------------------------------
<PAGE>

                           CONSOLIDATED BALANCE SHEET
                           --------------------------

                                  JUNE 30, 2001
                                  -------------


                                     ASSETS

<TABLE>
<CAPTION>

                                                                                2001
                                                                                ----

CURRENT ASSETS:
<S>                                                                             <C>
    Cash                                                                        $   999,018
    Restricted Cash                                                                 490,000
    Accounts Receivable (Less Allowance for Doubtful
       Accounts of ($209,927)                                                     1,819,856
    Inventory                                                                       367,326
    Notes Receivable - Current Portion                                               26,865
    Miscellaneous Receivable                                                         38,633
    Prepaid Expense                                                                 111,564
    Prepaid Expense - Income Taxes                                                   83,904
    Deferred Income Tax                                                              58,730
    Due From Officer                                                                 44,690
                                                                                  ---------
        TOTAL CURRENT ASSETS                                                      4,040,586
                                                                                  ---------

PROPERTY AND EQUIPMENT:
    Land                                                                            451,925
    Building                                                                      1,085,950
    Trucks                                                                        2,604,147
    Fuel Tanks                                                                    1,100,588
    Machinery and Equipment                                                         490,325
    Leasehold Improvements                                                          497,865
    Cylinders                                                                       507,394
    Office Furniture and Equipment                                                  183,625
    Website Development Costs                                                     2,264,141
                                                                                  ---------
                                                                                  9,185,960
    Less: Accumulated Depreciation and Amortization                               2,344,458
                                                                                  ---------
        NET PROPERTY AND EQUIPMENT                                                6,841,502
                                                                                  ---------

OTHER ASSETS:
    Deposits                                                                        101,283
    Notes Receivable - Less Current Portion                                         231,102
    Customer List, Less Accumulated Amortization of  ($188,122)                     422,728
    Covenant Not to Compete, Less Accumulated Amortization of  ($210,193)            73,374
    Development Costs - Franchising                                                  45,955
                                                                                  ---------
         TOTAL OTHER ASSETS                                                         874,442
                                                                                  ---------

        TOTAL ASSETS                                                            $11,756,530
                                                                                ===========

</TABLE>


                   See Accompanying Notes and Auditor's Report
                                       F-3
                       ABLE ENERGY, INC. AND SUBSIDIARIES

                             BALANCE SHEET (CONT'D)

<PAGE>

                                  JUNE 30, 2001
                                  --------------



                       LIABILITIES & STOCKHOLDERS' EQUITY
                       ----------------------------------



                                                                        2001
                                                                        ----

CURRENT LIABILITIES:
    Accounts Payable                                                $ 1,655,487
    Note Payable - Bank                                                 449,720
    Note Payable - Other                                                500,000
    Current Portion of Long-Term Debt                                   525,882
    Accrued Expenses                                                    456,965
    Accrued Taxes                                                        28,174
    Customer Pre-Purchase Payments                                    1,324,249
    Customer Credit Balances                                            223,720
    Escrow Deposits                                                       5,000
                                                                      ----------
        TOTAL CURRENT LIABILITIES                                     5,169,197

DEFERRED INCOME                                                          79,679
DEFERRED INCOME TAXES                                                    55,776
LONG TERM DEBT: less current portion                                  1,692,946
                                                                      ----------
        TOTAL LIABILITIES                                             6,997,598
                                                                      ----------

STOCKHOLDERS' EQUITY:
    Preferred Stock
    Authorized 10,000,000 Shares Par Value $.001 per share
     Issued - None                                                         -
    Common Stock
    Authorized 10,000,000 Par Value $.001 per share Issued
      and Outstanding 2,000,000 Shares                                    2,000
    Paid in Surplus                                                   5,662,775
    Retained Earnings (Deficit)                                       (905,843)
                                                                      ----------
        TOTAL STOCKHOLDERS' EQUITY                                    4,758,932
                                                                      ----------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $11,756,530
                                                                     ===========






                   See Accompanying Notes and Auditors' Report
                                       F-4
                       ABLE ENERGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
<PAGE>

<TABLE>
<CAPTION>

                                                                                       NOTE 1
                                                                                       ------


                                                                                   SIX MONTHS ENDED      SIX MONTHS ENDED
                                                                                       JUNE 30,              JUNE 30,
                                                                                         2001                  2000
                                                                                      (AUDITED)            (UNAUDITED)



<S>                                                                                       <C>                   <C>
         NET SALES                                                                        $18,189,597           $15,966,984

         COST OF SALES                                                                     15,108,198            13,043,018
                                                                                           ----------            ----------

              GROSS PROFIT                                                                  3,081,399             2,923,966
                                                                                           ----------            ----------

         EXPENSES
              Selling, General and Administrative Expenses                                  3,207,765             1,995,190
              Depreciation and Amortization Expense                                           591,397               338,100
                                                                                           ----------            ----------
                 Total Expenses                                                             3,799,162             2,333,290
                                                                                           ----------            ----------

             INCOME (LOSS) FROM OPERATIONS                                                  (717,763)               590,676
                                                                                           ----------            ----------

         OTHER INCOME (EXPENSES):
              Interest and Other Income                                                       106,514               145,285
              Interest Expense                                                              (130,609)              (98,100)
              Loss on Abandonment of Fixed Assets                                               -                  (42,206)
                                                                                           ----------            ----------
                 Total Other Income (Expense)                                                (24,095)                 4,979
                                                                                           ----------            ----------

              INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (CREDIT)                      (741,858)               595,655

         PROVISION FOR INCOME TAXES (CREDIT)                                                 (16,635)               120,650
                                                                                           ----------            ----------

              NET (LOSS) INCOME                                                            $(725,223)             $ 475,005
                                                                                           ==========            ==========

         BASIC EARNINGS (LOSS) PER COMMON SHARE                                             $  (.363)              $   .238
                                                                                            --------               --------

         DILUTED EARNINGS PER COMMON SHARE                                                  $  (.355)              $   .238
                                                                                            --------               --------

         WEIGHTED AVERAGE NUMBER OF COMMON SHARES    OUTSTANDING
                                                                                            2,000,000             2,000,000
                                                                                            =========             ---------
         WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, ASSUMING DILUTION
                                                                                            2,041,408             2,000,000
                                                                                            =========             =========

</TABLE>








                   See Accompanying Notes and Auditors' Report
                                       F-5
                       ABLE ENERGY, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                         SIX MONTHS ENDED JUNE 30, 2001


<PAGE>

                                  COMMON STOCK
                                 .001 PAR VALUE
                                 ---------------

<TABLE>
<CAPTION>

                                                                     ADDITIONAL                               TOTAL
                                                                       PAID-IN           RETAINED         STOCKHOLDERS'
                                   SHARES            AMOUNT            SURPLUS           EARNINGS            EQUITY
                                   ------            ------            -------           --------            ------

<S>                              <C>                <C>               <C>               <C>                <C>
Balance - January 1, 2001        2,000,000          $ 2,000           $5,662,775        $(180,620)         $5,484,155

Net Loss                                                                                 (725,223)           (725,223)
                                 ---------          -------            ---------         ---------          ----------
Balance - June 30, 2001                                                                 $(905,843)         $4,758,932
                                                                                        =========          ==========
                                 2,000,000          $ 2,000           $5,662,775
                                 =========          =======           ==========

</TABLE>
















                   See Accompanying Notes and Auditors' Report
                                       F-6


<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>


                                                                                 SIX MONTHS ENDED JUNE 30
                                                                                  NOTE 1
                                                                                  ------
                                                                            2001                 2000


                                                                                 AUDITED               UNAUDITED
                                                                                 -------               ---------

  CASH FLOWS FROM OPERATING ACTIVITIES
  ------------------------------------
<S>                                                                             <C>                    <C>
     Net Income (Loss)                                                          $(725,223)             $  475,005
     Adjustments to Reconcile Net Income to Cash
     used by Operating Activities:
        Depreciation and Amortization                                              591,397                338,100
        Loss on Disposition of  Equipment                                                -                 42,206
        (Increase) Decrease in:
           Accounts Receivable                                                   1,292,686               (205,340)
           Inventory                                                             1,141,749                (73,540)
           Prepaid Expenses                                                         30,559                (33,584)
           Deposits                                                                  9,965                 57,000
           Prepaid Income Taxes                                                     22,637                116,650
        Increase (Decrease) in:
           Accounts Payable                                                    (1,231,771)                303,597
           Accrued Expenses                                                       (24,881)                 40,053
           Other Taxes Payable                                                      25,140                    -
           Customer Advance Payments                                               308,460               (156,738)
           Deferred Income Taxes                                                   (3,225)                  4,000
           Deferred Income                                                         (9,178)                 39,518
                                                                                ----------            -----------
             NET CASH PROVIDED BY OPERATING ACTIVITIES                           1,428,315                946,927
                                                                                ----------            -----------

  CASH FLOWS FROM INVESTING ACTIVITIES
  ------------------------------------
     Purchase of Property and Equipment                                          (465,935)              (271,419)
     Web Site Development Costs                                                  (108,306)            (1,101,092)
     Development Costs                                                            (45,955)                   -
     Note and Other Receivables                                                      7,536               (23,981)
     Decrease Notes Receivable - Sale of Equipment                                  13,177                   -
                                                                                ----------            -----------
              NET CASH USED  BY INVESTING ACTIVITIES                             (599,483)            (1,396,492)
                                                                                ----------            -----------

  CASH FLOWS FROM FINANCING ACTIVITIES
  ------------------------------------
    (Decrease) Increase in Notes Payable - Bank                                  (204,070)                 91,014
     Decrease in Long-Term Debt                                                  (344,834)               (320,881)
     Increase in Long-Term Debt                                                    101,603                   -
     Increase in Note Payable - Other                                              500,000                   -
     Increase in Escrow Deposit Payable                                              -                     20,000
                                                                                ----------            ------------
             NET CASH (USED) PROVIDED  BY FINANCING  ACTIVITIES                     52,699               (209,867)
                                                                                ----------            ------------

  NET (DECREASE) INCREASE IN CASH                                                  881,531               (659,432)
  Cash - Beginning of Year                                                         117,487              2,926,412
                                                                                ----------            ------------
  Cash - End of Year                                                            $  999,018             $2,266,980
                                                                                ==========            ============

  The Company had Interest Cash Expenditures of:                                $  130,609             $   98,100
  The Company had Tax Cash Expenditures of:                                     $    7,725             $     -

</TABLE>




                   See Accompanying Notes and Auditors' Report
                                      F-7

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                                  JUNE 30, 2001
                                  -------------



NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------

               CONSOLIDATION AND BASIS OF PRESENTATION
               Change of Fiscal Year
               End: The board of Directors have elected to change the Company
               and Subsidiaries' year end from December 31, to June 30, to more
               clearly reflect the natural business year end when the business
               activities have reached the lowest point in their annual cycle.
               The initial year of the change will be a six month short period
               year end, January 1, 2001 to June 30, 2001.

               PRINCIPLES OF CONSOLIDATION
               The consolidated financial statements include the accounts of
               Able Energy, Inc. and its subsidiaries. The minority interest of
               1% in Able Propane, LLC is immaterial and has not been shown
               separately. All material inter-company balances and transactions
               were eliminated in consolidation.

               MAJORITY OWNERSHIP
               The Company is the majority owner, owning 70.6% of the issued
               shares of a subsidiary, PriceEnergy.Com, Inc. in which their
               capital investment is $25,000. The subsidiary has established a
               Web Site for the sale of products through a network of suppliers
               originally on the East Coast of the United States. The Web Site
               became active in October 2000 (See Notes 10 and 14)

               MINORITY INTEREST
               The minority interest in PriceEnergy.Com, Inc. is a deficit and,
               in accordance with Accounting Research Bulletin No. 51,
               subsidiary losses should not be charged against the minority
               interest to the extent of reducing it to a negative amount. As
               such, the losses have been charged against the Company, the
               majority owner. The loss for six months ended June 30, 2001 is
               $782,304, (See Notes 10 and 14).

               NATURE OF OPERATIONS
               Able Oil Company, Able Melbourne and Able Energy New York, Inc.
               are full service oil companies that market and distribute home
               heating oil, diesel fuel and kerosene to residential and
               commercial customers operating in the northern New Jersey,
               Melbourne, Florida, and Warrensburg, New York respectively. Able
               Propane,installs propane tanks which it owns and sells propane
               for heating and cooking, along with other residential and
               commercial uses.




                                       F-8

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------------------

               The Company's operations are subject to seasonal fluctuations
               with a majority of the Company's business occurring in the late
               fall and winter months. Approximately 70% of the Company's
               revenues are earned and received from October through March, and
               the overwhelming majority of such revenues are derived from the
               sale of home heating fuel. However, the seasonality of the
               Company's business is offset, in part, by the increase in
               revenues from the sale of diesel and gasoline fuels during the
               spring and summer months due to the increased use of automobiles
               and construction apparatus.

               INVENTORIES
               Inventories are valued at the lower of cost (first in, first out
               method) or market.

               PROPERTY AND EQUIPMENT
               Property and equipment are stated at cost less accumulated
               depreciation. Depreciation is provided by using the straight-line
               method based upon the estimated useful lives of the assets (5 to
               40 years). Depreciation expense for the six months ended June 30,
               2001 and 2000 amounted to $331,193 and $280,723, respectively.

               For income tax basis, depreciation is calculated by a combination
               of the straight-line and modified accelerated cost recovery
               systems established by the Tax Reform Act of 1986.

               Expenditures for maintenance and repairs are charged to expense
               as incurred whereas expenditures for renewals and betterments are
               capitalized.

               The cost and related accumulated depreciation of assets sold or
               otherwise disposed of during the period are removed from the
               accounts. Any gain or loss is reflected in the year of disposal.

               WEB SITE DEVELOPMENT COSTS
               Costs of $2,264,140 incurred in the developmental stage for
               computer hardware and software have been capitalized in
               accordance with accounting pronouncement SOP98-1. The costs are
               included in Property and Equipment and will be amortized on a
               straight line basis during the estimated useful life, 5 years.
               Operations commenced in October 2000. Amortization for the six
               months ended June 30, 2001 is $210,821.




                                       F-9

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------



NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------------------

               INTANGIBLE ASSETS
               Intangibles are stated at cost and amortized as follows: Customer
               Lists of $571,000 and Covenant Not To Compete of $183,567 related
               to the Connell's Fuel Oil Company acquisition on October 28,
               1996, by Able Oil Company are being amortized over a
               straight-line period of 15 and 5 years, respectively. The current
               period amortization also includes a customer list of $39,850 and
               Covenant Not To Compete of $100,000 relating to the acquisition
               from B & B Fuels on August 27, 1999, is being amortized over a
               straight-line period of 10 and 5 years, respectively. The
               amortization for the six months ended June 30, 2001 and 2000 are
               $49,383 and $57,377, respectively.

               For income tax basis, the Customer Lists and the Covenant Not To
               Compete are being amortized over a straight-line method of 15
               years as per the Tax Reform Act of 1993.

               USE OF ESTIMATES
               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the amounts reported
               in the financial statements and accompanying notes. Although
               these estimates are based on management's knowledge of current
               events and actions it may undertake in the future, they may
               ultimately differ from actual results.

               INCOME TAXES
               Effective January 1, 1997, all the subsidiaries, which were
               S-Corporations, terminated their S-Corporation elections. The
               subsidiaries are filing a consolidated tax return with Able
               Energy, Inc.

               Effective January 1, 1997, the Company has elected to provide for
               income taxes based on the provisions of Financial Accounting
               Standards Board ("FASB") Statement of Financial Accounting
               Standards ("SFAS") No. 109, "Accounting for Income Taxes", which
               requires recognition of deferred tax assets and liabilities for
               the expected future tax consequences of events that have been
               included in the financial statements and tax returns in different
               years. Under this method, deferred income tax assets and
               liabilities are determined based on the difference between the
               financial statement and tax bases of assets and liabilities using
               enacted tax rates in effect for the year in which the differences
               are expected to reverse.




                                      F-10

<PAGE>

                      ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 1         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------------------

               CONCENTRATIONS OF CREDIT RISK
               The Company performs on-going credit evaluations of its
               customers' financial conditions and requires no collateral from
               its customers.

               Financial instruments which potentially subject the Company to
               concentrations of credit risk consists of checking and savings
               accounts with several financial institutions in excess of insured
               limits. The excess above insured limits is approximately
               $810,758. The Company does not anticipate non-performance by the
               financial institutions.

               CASH
               For the purpose of the statement of cash flows, cash is defined
               as balances held in corporate checking accounts and money market
               accounts.

               ADVERTISING EXPENSE
               Advertising costs are expensed at the time the advertisement
               appears in various publications and other media. The expense was
               $279,523 for the six months ended June 30, 2001.

NOTE 2         NOTES RECEIVABLE
--------------------------------

          A.   The Company has a Receivable from Able Montgomery, Inc. and
               Andrew W. Schmidt related to the sale of Able Montgomery, Inc. to
               Schmidt, and truck financed by Able Energy, Inc. No payments of
               principal or interest had been received for more than one year. A
               new note was drawn dated June 15, 2000 for $170,000, including
               the prior balance, plus accrued interest. The Note bears interest
               at 9.5% per annum and payments commence October 1, 2000. The
               payments will be monthly in varying amount each year with a final
               payment of $55,981.07 due September 1, 2010. No payments were
               received in the year ended December 31, 2000. In February 2001,
               two (2) payments were received in the amount $2,691.66, interest
               only.







                                      F-11

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 2          NOTES RECEIVABLE (CONT'D)
-----------------------------------------

               The note is secured by a pledge and security agreement and stock
               purchase agreement (Stock of Able Montgomery, Inc.), dated
               December 31, 1998, and the assets of Andrew W. Schmidt with the
               note dated June 15, 2000. The income on the sale of the company
               in December 1998 and the accrued interest on the drawing of the
               new note are shown as deferred income to be realized on
               collection of the notes.

               Maturities of the Note Receivable are as follows:

                    For the Year Ending
                          JUNE 30,                            PRINCIPAL AMOUNT
                          --------                            ----------------
                           2002                                    $  6,348
                           2003                                       9,876
                           2004                                      10,856
                           2005                                      11,933
                           2006                                           -
                           Balance                                  130,987
                                                                   --------
                                    Total                          $170,000
                                                                   ========


         B.       Able Oil Company has three (3) Notes Receivable for the sale
                  of oil delivery trucks to independent drivers who also deliver
                  oil for the Company. The Notes bear interest at the rate of
                  12% per annum. Two notes began December 1998 and one began
                  February 1999. The Notes are payable eight (8) months per year
                  September through April, the oil delivery season.

                  Maturities of these Notes Receivable are as follows:

                     For the Year Ending
                           JUNE 30,                           PRINCIPAL AMOUNT
                           --------                           ----------------
                            2002                                  $  26,865
                            2003                                     23,598
                            2004                                     19,039
                            2005                                      6,948
                            2006                                      7,524
                            Balance                                   3,993
                                                                   --------
                                            Total                  $ 87,967
                                                                   ========





                                      F-12


<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 3          INVENTORIES
---------------------------


                ITEMS                                2001
                -----                                -----

                Heating Oil                           $ .134,229
                Diesel Fuel                               40,770
                Kerosene                                   8,013
                Propane                                   14,287
                Parts and Supplies                       170,027
                                                      ----------
                     TOTAL                            $  367,326
                                                      ==========

NOTE 4         NOTES PAYABLE BANK
---------------------------------

               The Agreement with Able Oil Company and PNC Bank, dated August
               11, 1999, was amended July 14, 2000. The amended agreement is as
               follows:

               1    The line of credit is increased from $500,000 to $750,000.
               2.   The current expiration date is as been extended to July 31,
                    2001.
               1.   Security is hereby amended to reduce the required amount of
                    pledged cash collateral from $972,000 to $490,000. This is
                    represented by a first priority lien on collateral
                    consisting of a savings account in Blackrock Provident
                    Institutional Funds.
               2.   Security is added by a guaranty and suretyship agreement
                    with Able Energy, Inc., Able Propane, LLC, Able Energy
                    Terminal, LLC, Able Oil Melbourne, Inc. and Able Energy New
                    York, Inc. and will unconditionally jointly and severally
                    guarantee payment to the Bank.
               3.   A security agreement granting the bank a first priority
                    perfected lien on the existing and future personal property
                    of Able Oil Company and the companies listed in item 4
                    above. Notwithstanding the aforesaid requirement, the named
                    entities may finance the acquisition of equipment with other
                    financial parties by way of true leases or financing leases
                    having an aggregate outstanding balance of $1,000,000 at any
                    given time, providing to such third party financiers liens
                    upon the equipment thus financed, which liens shall be
                    superior in priority to the lien of the bank in any such
                    equipment.

               6.   The agreement calls for the borrower, Able Oil Company, to
                    maintain a minimum debt ratio as defined in the agreement
                    commencing with the fiscal year end 2000. Able Oil Company
                    was in compliance with the covenant for the year ended
                    December 31, 2000. The line of credit bears an interest rate
                    of Prime minus one-half (1/2%) with an outstanding balance
                    of $449,720 at June 30, 2001 (See Note 18). There is a term
                    loan with PNC Bank which was refinanced for a total of
                    $675,000 on June 12, 1998 with a current interest rate of
                    8.15%. The balance at June 30, 2001 is $- 0 - .

                                      F-13

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 5         NOTE PAYABLE
----------------------------

               The Company has borrowed $500,000 from an unrelated individual.
               The Note is dated June 26, 2001 with interest at 12% per annum.
               The interest will be paid monthly at $5,000 per month commencing
               on August 1, 2001. The Note will mature on June 26, 2002 unless
               the borrower (the Company), at its option, elects to extend the
               maturity date to December 26, 2002. The Note may be prepaid in
               whole or part from time-to-time without penalty. At the maturity
               date, a final payment of the unpaid principal and interest shall
               be due and payable. In connection with this Note, the Company has
               issued the lender warrants to purchase 40,000 shares of its
               common stock at $4 per share. The warrants vest immediately and
               must be exercised no later than June 26, 2004.

NOTE 6         LONG-TERM DEBT
-----------------------------

               Mortgage note payable dated, August 27, 1999, related to the
               purchase of B & B Fuels facility and equipment. The total note is
               $145,000. The note is payable in the monthly amount of principal
               and interest of $1,721.18 with and interest rate of 7.5% per
               annum. The initial payment was made on September 27, 1999, and
               continues monthly until August 27, 2009 which is the final
               payment. The note is secured by a mortgage made by Able Energy
               New York, Inc. on property at 2 and 4 Green Terrace and 4 Horican
               Avenue, Town of Warrensburg, Warren County, New York. The balance
               due on this Note at June 30, 2001 was $125,844.

               Mortgage note payable dated, August 31, 1999, related to the
               purchase of the facility and equipment in Rockaway, New Jersey by
               Able Energy Terminal, LLC ("Terminal"). The note is in the amount
               of $650,000.

               Pursuant to Section 4.4 of the Agreement of Sale to purchase the
               Terminal, , the Principal Sum of the $650,000 Note shall be
               reduced by an amount equal to one-half of all sums expended by
               Borrower on the investigation and remediation of the property
               provided, however, that the amount of said reduction shall not
               exceed $250,000 (the "Remediation Amount").

               The "Principal Sum: Less the "Remediation Amount" shall be an
               amount equal to $400,000 (the "Reduced Principal Sum"). The
               Reduced Principal Sum shall bear interest from the date hereof at
               the rate of 8.25% per annum. Any portion of the Remediation
               Amount not utilized in the investigation and remediation of the
               property shall not begin to accrue interest until such time that
               (i) a "No Further Action Letter" is obtained from the Department
               of Environmental Protection and (ii) an outstanding lawsuit
               concerning the property is resolved through settlement or
               litigation (subject to no further appeals). All payments on this
               Note shall be applied first to the payment of interest, with any
               balance to the payment to reduction of the reduced Principal Sum.

                                      F-14



<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  --------------


NOTE 6         LONG-TERM DEBT (CONT'D)
---------------------------------------

               Interest shall be due and payable monthly commencing on September
               30, 1999, on the Reduced Principal Sum of the Note, on the last
               day of each month thereafter up to and including July 31, 2004.

               The Note is collateralized by the property and equipment
               purchased and assignment of the leases. The balance due on this
               Note at June 30, 2001 was $650,000.

               Note Payable to Orix Credit Alliance, Inc. at an interest rate of
               9.00% with a monthly payment of $2,056. The Note originated on
               August 24, 1997 and matures on August 24, 2001. The Note is
               collateralized by a fuel oil truck.
                                                         2001
                                                        ------

                    Note Balance                      $  4,068

               Two Notes Payable to Chrysler Financial at a range of interest
               from of 8.9% to 9.15% with total monthly payments of $830.53. The
               earliest of these Notes originated on March 25, 1999 and the last
               Note matures in March 2004. These Notes are collateralized by a
               1999 and a 1998 Dodge truck.

                    Notes Balance                     $ 23,868

               Note Payable to World Omni at an interest rate of 8.99% with a
               monthly payment of $316.44. The Note originated October 20, 2000
               and matures October 20,2005. The Note is collateralized by a Ford
               F-150 Pick-up Truck.

                    Note Balance                      $ 13,636

               Note Payable to Fleet Capital Leasing at an interest rate of
               8.50% with a monthly payment of $1,124.52. The Note originated on
               November 10, 1997 and matures on November 10, 2001. The Notes are
               collateralized by a 1998 Freightliner fuel oil truck.

                    Note Balance                      $   5,505








                                      F-15



<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 6         LONG-TERM DEBT (CONT'D)
---------------------------------------

               The Company and Able Propane, LLC have a lease/purchase agreement
               with First Sierra Financial, Inc. The agreement calls for 48
               payments of $1,457.50, including principal, interest and sales
               tax and a final purchase option payment of $5,576.02 plus sales
               tax. The interest rate is approximately 8 1/2%. The agreement is
               collateralized by the equipment purchase.

                       Balance Due                            $ 23,973

               Able Oil Company and Able Propane, LLC have a lease/purchase
               agreement with Summit Leasing Corporation, Lease #002, interest
               approximately 8 1/2% collateralized by a 1998 Peterbilt Model 375
               truck and a Trinity trailer. The lease and payments began August
               20, 1998 at $1,605.50 per month for 48 payments thereafter until
               all payments are made through and including July 20, 2002.

                       Balance Due                            $ 24,187

               Able Oil Company and Able Propane have a lease/purchase agreement
               with Fleet Capital Leasing, Lease #003, interest approximately 8
               1/2% collateralized by a Freightliner truck. The lease commenced
               November 10, 1998 and has 48 monthly payments of $1,286.12 until
               November 2002 with a final purchase option payment of $12,682.

                       Balance Due                            $ 32,271

               Notes payable to AEL Leasing Co., Inc. under a master lease
               agreement dated March 3, 1997. During 1997 Able Propane, LLC was
               advanced $133,456, with no principal payments. AEL had extended
               Able Propane a line of credit of $150,000 in 1997. In June 1998
               the loan was finalized at $178,920 with 36 monthly payments of
               $4,970, including principal and interest, with an interest rate
               of 8.25%. The note is collateralized by the tanks and equipment
               purchased. The note matures in June 2001.

                       Notes Balance                          $    -0-

               Able Oil Company and Able Propane, LLC have a lease/purchase
               agreement with Fleet Capital Leasing, Lease #004, collateralized
               by a Ford F-450 truck and a 1997 Chevy 3/4 ton van. The lease and
               payments began January 1, 1999 at $1,591.87 per month for 48
               payments thereafter until all payments are made through and
               including December 2002. Interest at 6.92%

                       Note Balance                           $ 41,294


                                      F-16

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 6         LONG-TERM DEBT (CONT'D)
---------------------------------------

               Note Payable Commonwealth Finance Inc. at an interest rate of
               7.90%, 36 payments of $447.33 The first payment began February
               1999 and matures January 2002. The Note is collateralized by
               propane tanks.

                      Note Balance                            $  3,050

               Able Oil Company has a lease/purchase agreement with Fleet
               Capital Leasing, Lease #005, interest approximately 8 1/2%
               collateralized by a 1999 Freightliner FL-70, 2800 gallon Tri
               State Truck tank and a 1999 Kenworth Model T-300 conventional cab
               and chassis. The lease payments began January 5, 1999 at
               $2,810.62 per month for 48 months and 5 additional days until all
               payments are made through January 10, 2003. Able Oil Company has
               the option to purchase all the equipment for an amount agreed
               upon as the fair market value at the end of the lease term.

                      Note Balance                            $ 71,938


               Two Notes payable to Ford Credit at interest rates of 3.90% and
               8.79%, with monthlFy payments of $602.32 and $737.34 including
               interest. The Notes originated in January 1999 and include 48
               monthly payments and mature December 2002. The Notes are
               collateralized by two 1998 Ford Econo-Line trucks.

                      Notes Balance                            $ 22,907

               The Company and Able Propane, LLC have a lease/purchase agreement
               with First Sierra Financial, Inc. The agreement calls for 48
               payments of $592.54, including principal and interest and sales
               tax and a final purchase option payment of $2,191.10, plus sales
               tax. The lease began February 1999 and ends January 2003. The
               interest rate is approximately 8 1/2%. The agreement is
               collateralized by the equipment purchase.

                      Note Balance                             $  9,321

               Two Notes payable to Ford Credit at interest rates of 8.60% and
               6.02% with monthly payments of $629.46 and $695.83 including
               interest. The Notes originated June 1999 and December 1999, they
               each include 48 monthly payments and mature May 2003 and November
               2003, respectively. The Notes are collateralized by two 1999 Ford
               Vans.

                      Notes Balance                            $ 33,086


                                      F-17

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 6         LONG-TERM DEBT (CONT'D)
---------------------------------------

               Able Oil Company has a lease/purchase agreement with Fleet
               Capital Leasing, lease #007, collateralized by equipment as
               stated in the agreement. The lease payments began December 25,
               1999 at $9,023.46 per month for 48 months and 5 additional days
               until all payments are made through November 25, 2003. The
               interest is an average of 4.5% per annum. Able Oil Company has
               the option to purchase all the equipment for an amount agreed
               upon as the fair market value at the end of the lease term.

                      Note Balance                           $ 247,860

               The Company has a lease purchase agreement with Diamond Lease
               (U.S.A.), Inc. collateralized by computer equipment and software
               on the books of Price Energy.Com, a subsidiary of the Company.
               The lease commenced October 1, 2000, with an initial payment of
               $32,062 paying the first and last payment. There will be 34
               payments of $16,031, final payment on August 1, 2003 and a $1
               purchase option payment. The annual rate of interest is 9.56%.

                      Note Balance                           $ 388,058

               The Company has Notes payable under Purchase Money Security
               Agreements No. 00501, 00502 and 00503 with Monarch Capital
               Corporation. Agreement #00501 commenced October 25, 2000, with
               the payment of $6,804 being the first and last payment. The
               payments will be 60 payments of $3,402, including principal and
               interest, with an interest rate of 11.5%. The Note will mature in
               September 2005. The note is secured by the equipment purchased,
               two 2001 Kenworth Oil Trucks and Two KW Fuel Tanks.

                      Notes Balance                          $ 138,763

               Agreement #00502 commenced December 21, 2000 for 60 months and
               matures November 21, 2005. The monthly payments are $1,834,
               including principal and interest with an interest rate of 12.5%.
               The Note is secured by the equipment purchased, one 2001 Kenworth
               Oil Truck and one Amthor 2800-gallon aluminum Cardinal Classic
               Canopy Style tank. This Note was sold to Sovereign Bank by
               Monarch.

                      Note Balance                           $  73,338

               The Company and Able Propane, LLC have a Lease/Purchase Agreement
               with New Concepts Leasing. The Lease commenced February 12, 2001,
               with the payment of $2,986 being the first and last payment. The
               payments will be 60 payments of $1,493, including principal and
               interest, with an interest rate of 10.88%. The Note will mature
               in February 2006 with a final principal payment of $5,000. The
               Note is secured by a 2001 Ford F-550 Cab and Chassis.

                      Note Balance                            $ 70,337


                                      F-18

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 6         LONG-TERM DEBT (CONT'D)
---------------------------------------

               Agreement #00503 commenced December 21, 2000 for 60 months and
               matures November 21, 2005. The monthly payments are $1,822.50,
               including principal and interest with an interest rate of 12.5%.
               The Note is secured by the equipment purchased, a 2001 Kenworth
               Model T 300 truck and 2800-gallon aluminum fuel tank.

                     Note Balance                             $ 72,878

               Agreement #00504 commenced on April 30, 2001 for 48 months and
               matures on April 30, 2005. The monthly payments are $2,692.48,
               including principal and interest with an interest rate of 6.80%.
               The Note is secured by furniture purchased.

                     Note Balance                             $ 96,608

               Note Payable to Ford Credit at an interest rate of 8.05% with
               monthly payments of $653.80, including interest. The note
               originated in September 2000 and includes 48 monthly payments and
               matures September 2004. The Note is collateralized by the ford
               Truck purchased.

                     Note Balance                            $ 23,336


               Note payable to GMAC Finance at an interest rate of 5.00% with
               monthly payments of $602.43, including interest. The Note
               originated in October 2000 and includes 48 monthly payments and
               matures October 2004. The Note is collateralized by the GMAC
               truck purchased.

                     Note Balance                            $ 22,700


               Maturities on the Notes Payable subsequent to June 30, 2001 are
               as follows:


                    FOR THE YEAR ENDING                    PRINCIPAL
                         JUNE 30,                           AMOUNT
                         -------                            ------
                           2002                              $ 525,882
                           2003                                521,543
                           2004                                257,906
                           2005                                143,731
                           2006                                 61,524
                          Balance                              708,242
                                                            ----------
                           TOTAL                            $2,218,828
                                                            ==========


                                      F-19

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------


NOTE 7         COVENANT NOT TO COMPETE
--------------------------------------

               On October 28, 1996, a Covenant Not To Compete was originated by
               the Able Oil Company, Connell's Fuel Oil Company and William
               Toriello. The Covenant is to last 5 years from the date of
               inception with a monthly installment of $3,059.44 starting
               December 1, 1996. The balance was paid in full September 7, 1999.
               The covenant is in effect until October 29, 2001.

NOTE 8          INCOME TAXES
----------------------------

               Effective January 1, 1997 the Company adopted Statement of
               Financial Accounting Standards No. 109, Accounting for Income
               Taxes.

               The differences between the statutory Federal Income Tax and
               Income Taxes is accounted for as follows:

<TABLE>
<CAPTION>

                                                                  2001                        2000
                                                                  ----                        ----


                                                                         PERCENT OF                       PERCENT OF
                                                                         PRETAX                           PRETAX
                                                         AMOUNT          INCOME          AMOUNT           INCOME
                                                         ------          ------          ------           ------


<S>                                                     <C>               <C>           <C>                <C>
Statutory Federal Income Tax (Benefits)                 $11,605           15.0%         $199,200           34.0%
Less: Benefit of Net Operating Loss Carryforward
                                                                                         (95,550)         (16.3%)
Increase resulting from State Income
Tax, net of Federal Tax Benefit
Less: Benefit of State Net Operating Loss                 5,030            7.6%           54,300            5.9%
                                                        -------           -----
Carryforward
                                                                                         (37,300)          (3.1%)
                                                                                        ---------          ------
Income Taxes
                                                        $16,635           22.6%         $120,650           20.5%
                                                        =======           =====         ========           ======

Income Taxes consist of:
 Current
 Deferred                                                   -                            116,650
    TOTAL                                                16,635                            4,000
                                                        -------                         --------
                                                        $16,635                         $120,650
                                                        =======                         ========

</TABLE>





                                      F-20

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 8         INCOME TAXES (CONT'D)
------------------------------------

               The types of temporary differences between the tax bases of
               assets and liabilities and their financial reporting amounts that
               give rise to a significant portion of the deferred tax liability
               and deferred tax asset and their approximate tax effects are as
               follows at:

                                                               2001
                                                               ----
                                                  TEMPORARY             TAX
                                                  DIFFERENCE            EFFECT
                                                  ----------            ------

               Depreciation                         $174,389            $55,776
               Allowance for Doubtful Accounts      $209,927            $54,695
               Gain on Sale of Subsidiary           $ 18,766             $4,035

NOTE 9         PROFIT SHARING PLAN
-----------------------------------

               Effective January 1, 1997, Able Oil Company established a
               Qualified Profit Sharing Plan under Internal Revenue Code Section
               401-K. The Company matches 25% of qualified employee
               contributions. The expense was $15,846 (2001) and $8,515 (2000).

NOTE 10        NOTE RECEIVABLE - SUBSIDIARY
--------------------------------------------

               The Company has a Note Receivable from Price Energy.Com, Inc. for
               advances made in the development of the Website, including
               hardware and software costs. All of PriceEnergy.Com, Inc's assets
               are pledged as collateral to Able Energy, Inc. The amount of the
               note is $1,350,000 dated November 1, 2000 with interest at 8% per
               annum. Interest, in the amount of $54,000 has been accrued for
               the six months ended June 30, 2001. The Note and interest have
               been eliminated in the consolidated financial statements (See
               Notes 1 and 14).

NOTE 11        COMMITMENTS AND CONTINGENCIES
--------------------------------------------

               The Company is subject to laws and regulations relating to the
               protection of the environment. While it is not possible to
               quantify with certainty the potential impact of actions regarding
               environmental matters, in the opinion of management, compliance
               with the present environmental protection laws will not have a
               material adverse effect on the financial condition, competitive
               position, or capital expenditures of the Company.




                                      F-21
<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 11         COMMITMENTS AND CONTINGENCIES (CONT'D)
------------------------------------------------------

                  In accordance with the agreement on the purchase of the
                  property on Route 46, Rockaway, New Jersey by Able Energy
                  Terminal, LLC, the purchaser shall commence after the closing,
                  the investigation and remediation of the property and any
                  hazardous substances emanating from the property in order to
                  obtain a No Further Action letter from the New Jersey
                  Department of Environmental Protection (NJDEP). The purchaser
                  will also pursue recovery of all costs and damages related
                  thereto in the lawsuit by the seller against a former tenant
                  on the purchased property. Purchaser will assume all
                  responsibility and direction for the lawsuit, subject to the
                  sharing of any recoveries from the lawsuit with the seller,
                  50-50. The seller by reduction of its mortgage will pay costs
                  related to the above up to $250,000 (see Note 6). A tentative
                  settlement has been achieved by the Company with regard to the
                  lawsuit. The settlement provides for a lump sum payment of
                  $397,500 from the defendants to the Company. In return, the
                  defendants require a release from the Estate (the Seller) and
                  a release and indemnification from the Company. The defendants
                  will provide a release to Able Energy and the Estate. Pursuant
                  to the settlement agreement, the Estate receives 50% of the
                  settlement amount, net of attorney fees. The Company's share
                  (the Purchaser) of the recovery shall be placed in an escrow
                  account and used exclusively to obtain a No Further Action
                  Letter. The costs of the cleanup pursuant to the Agreement of
                  Sale must be shared equally (50/50) by the seller and
                  purchaser up to Seller's cap of $250,000. Seller's
                  contribution to the cleanup is in the form of a reduction to
                  the Note and not by direct payments. In the opinion of
                  management, the Company will not sustain costs in this matter
                  which will have a material adverse effect on its financial
                  condition.

                  Able Energy Terminal LLC, (Able) a subsidiary, the seller of
                  the property and the former tenants, have a draft agreement
                  which has not been signed as of this report. In the agreement,
                  the defendants (former tenants) agree to pay a certain sum to
                  Able, the settlement amount, and Able will undertake all
                  action necessary to investigate and remediate the
                  contamination of the soil and groundwater at the property.
                  Able shall enter into a memorandum of agreement with NJDEP and
                  shall request from NJDEP a No Further Action letter.

                  Price Energy.Com, Inc., a subsidiary, has commenced suit
                  against ThinkSpark Corporation on Consulting Services
                  Agreement, dated June 2, 2000. ThinkSpark was to provide
                  services of professional quality performed by knowledgeable
                  staff familiar with the operation of the software and its
                  application and conforming to generally accepted data
                  processing practices. ThinkSpark agreed that it could develop,
                  deliver and install the system to be operational by mid-August
                  2000. ThinkSpark ceased work in mid-October 2000 and the
                  project was not completed. Price Energy hired another firm
                  which is completing the project. ThinkSpark admits the
                  original estimate for the project was $266,000.

                                      F-22


<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 11         COMMITMENTS AND CONTINGENCIES (CONT'D)
------------------------------------------------------

                  Price Energy paid ThinkSpark $82,539 and is paying the new
                  firm $75,600 which will complete the work.

                  ThinkSpark has filed a counterclaim seeking payment of
                  $283,100.62, which is the total amount of bills rendered.
                  There is a liability of $107,861 in accounts payable on the
                  financial statements. This amount represents the original
                  estimate of $266,000, less payments, to ThinkSpark and the new
                  firm hired to complete the project. The Company is unable to
                  predict the outcome of the case, but management feels the
                  settlement should not be more than the booked liability.

                  The Company in the normal course of business has been involved
                  in several suits. Two suits have been settled out of court at
                  agreeable terms, according to management. No suits are
                  currently in litigation, except as noted above.

                  Able Oil Company has been examined by the Internal Revenue
                  Service through the year ended December 31, 1995. The only
                  open year for Able Oil Company is December 31, 1996 and Able
                  Energy, Inc., et al, open years are December 31, 1997, 1998,
                  1999 and December 31, 2000. The Company has a net operating
                  loss carryforward of approximately $640,000 at June 30, 2001.

NOTE 12         OPERATING LEASE
-------------------------------

                  Able Energy Terminal, LLC, has acquired the following lease on
                  the property it purchased on Route 46 in Rockaway, New Jersey.

                  The lease with Able Oil Company, a wholly owned subsidiary of
                  Able Energy, Inc., has an expiration date of July 31, 2004.
                  The lease provides for a monthly payment of $1,200 plus a one
                  cent per gallon through put, as per a monthly rack meter
                  reading.

                  Estimated future rents are $14,400 per year, plus the one cent
                  per gallon through put charges per the monthly rack meter
                  readings.

                  The Company leased 9,800 square feet in the Rockaway Business
                  Centre on Green Pond Road in Rockaway, New Jersey. The
                  facility will be used as a call center and will combine the
                  administrative operations in New Jersey in one facility. The
                  lease has a term of five (5) years from August 1, 2000 through
                  July 31, 2005.



                                      F-23

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 12         OPERATING LEASE (CONT'D)
----------------------------------------
                  The rent for the first year is $7,145,83 per month and the
                  second through fifth year is $7,431.67 per month, plus 20.5%
                  of the building's annual operational costs and it's portion of
                  utilities. The monthly rent, including Common Area Charges, as
                  of October 2000 is $9,084 per month. The lease does not
                  contain any option for renewal. The rent expense was $54,792
                  for the six months ended June 30, 2001. The estimated future
                  rents are as follows:

                           YEAR ENDED JUNE 30,
                           -------------------
                                   2002                     $110,000
                                   2003                      113,000
                                   2004-2006                 290,000
                                                             -------
                                            Total           $513,000
                                                            ========

                  The following summarizes the month to month operating leases
for the other subsidiaries:

                      Able Oil Melbourne           $500.00, per month
                                                   Total  rent expense, $3,000
                      Able Energy New York         $500.00, per month
                                                   Total  rent expense, $3,000

NOTE 13          FRANCHISING
----------------------------

                  The Company sells franchises permitting the operation of a
                  franchised business specializing in residential and commercial
                  sales of fuel oil, diesel fuel, gasoline, propane and related
                  services. The Company will provide training, advertising and
                  use of Able credit for the purchase of product, among other
                  things, as specified in the Agreement. The franchisee has an
                  option to sell the business back to the Company after two (2)
                  years of operations for a price calculated per the Agreement.
                  The Company signed its first franchise agreement in September
                  2000. On June 29, 2001, PriceEnergy.Com franchising, LLC, a
                  subsidiary, signed its first franchise agreement. The
                  franchisee will operate a B-franchised business, using the
                  proprietary marks and a license from PriceEnergy.Com, Inc. and
                  will establish the presence of the franchisee's company on the
                  PriceEnergy internet website. The franchisee will have the
                  exclusive territory of Fairfield County, Connecticut as
                  designated in the agreement. The franchisee paid the following
                  amounts in July 2001:

                  1.       A non-refundable franchise fee of $25,000.

                  2.       An advertising deposit of $15,000 and a $5,000 escrow
                           deposit.





                                     F - 24

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 14         RELATED PARTY TRANSACTIONS
------------------------------------------

                  $44,690 is due from the major Shareholder/Officer of the
                  Company. This amount is evidenced by a Note bearing interest
                  at a rate of 8 1/2% between the Shareholder and the Company.

                  The following officers of this Company own stock in the
                  subsidiary, PriceEnergy.Com, Inc., which they incorporated in
                  November 1999.

                           Chief Executive Officer                     23.5%
                           President                                    3.6%

                  No capital contributions have been made by these officers (See
                  Notes 1 and 10).


NOTE 15         EARNINGS PER SHARE
----------------------------------

                  The shares used in the computation of the Company's basic
                  Earnings Per Common Share are as follows:

<TABLE>
<CAPTION>
                                                                                   2001                       2000
                                                                                   ----                       ----
<S>                                                                              <C>                       <C>
                  Weighted Average of Common Shares Outstanding                  2,000,000                 2,000,000
                  Dilutive Effect of:
                      Employee Stock Options                                        41,408                      -
                                                                                ----------                 ---------

                  Weighted Average Common Shares Outstanding,
                        Assuming Dilution                                        2,041,408                 2,000,000
                                                                                ==========                 =========
</TABLE>

                  Options to purchase 56,000 shares of common stock at $5.00 per
                  share were outstanding during the second quarter of 2001, but
                  were not included in the computation of diluted EPS because
                  the options' exercise price was greater than the average
                  market price of the common shares.

NOTE 16          STOCK OPTION PLANS
-----------------------------------

                  The Company has stock option plans under which stock options
                  may be issued to officers, key employees, and non-employee
                  directors to purchase shares of the Company's authorized but
                  unissued common stock. The Company also has a stock option
                  plan under which stock options may be granted to employees and
                  officers.

                  Options granted currently expire no later than 3 to 5 years
                  from the grant and have vesting periods from none to 25% at
                  grant and 25% each anniversary.



                                     F - 25



<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 16          STOCK OPTION PLANS (CONT'D)
--------------------------------------------

<TABLE>
<CAPTION>
                                                                                OUTSTANDING OPTIONS
                                                                                -------------------

                                                           NUMBER OF               EXERCISE
                                                            SHARES                  PRICE                  TERM
                                                            ------                  -----                  ----
<S>                                                         <C>                     <C>                   <C>
               January 6, 2000
                  Grants                                    56,000                  $5.00                 5 years
                  Exercises                                      0

               December 1, 2000
                  Grants                                    48,090                  $3.25                 3 years
                  Exercises                                  1,250

               December 21, 2000
                  Grants                                    60,000                  $1.80                 5 years
                  Exercises                                      0

                  Grants                                    24,000                  $2.25                 5 years
                  Exercises                                      0
</TABLE>

NOTE 17           STOCK WARRANTS
--------------------------------

                  The Company has issued stock warrants as follows:

         1.       60,000 Common Stock Purchase Warrants at $4.81 per share,
                  effective August 31, 2000, and expiring August 31, 2005, have
                  been issued to Andrew Alexander Wise & Company in connection
                  with an investment banking advisory agreement with the
                  Company, dated July 1, 2000.

         2.       40,000 Common Stock Purchase Warrants at $4.00 per share,
                  effective June 26, 2001 and expiring June 26, 2004, have been
                  issued in connection with a $500,000 Note Payable (See Note
                  5).

                  The above warrants to purchase shares of common stock were
                  outstanding during the second quarter of 2001, but were not
                  included in the computation of diluted EPS because the
                  warrants' exercise price was greater than the average market
                  price of the common stock.



                                     F - 26

<PAGE>


                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       ----------------------------------

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
               ---------------------------------------------------

                                  JUNE 30, 2001
                                  -------------

NOTE 18         SUBSEQUENT EVENTS
---------------------------------

A.       The line of credit with PNC Bank for Able Oil Company which expired
         June 30, 2001 has been extended to September 29, 2001. The loan
         documents are amended as follows:

         1.       During the extension period there shall be no availability for
                  Borrower for further advances.
         2.       The Borrower shall pay to the bank the amount of $170,219
                  substantially simultaneously with the execution and delivery
                  of this amendment, thus reducing the loan balance to $490,000,
                  the secured amount.
         3.       The expiration date is deemed amended to mean September 29,
                  2001 or such later date as may be designated by the bank by
                  written notice from the bank to the Borrower.

2.       The Company has received a term letter, dated September 25, 2001, from
         Fleet National Bank. The Bank has proposed to provide the Company a
         credit facility of $1,500,000. The Bank has also approved a maximum of
         $1,000,000 in standby letters of credit listing the Borrower's major
         suppliers as the beneficiary which is available to the Company on an as
         needed basis. The Company and the bank are currently finalizing the
         loan documents.


                                     F - 27