|SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549


FORM 10-QSB



(Mark One)
|-------------------------------------------------------------------------------------

|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- |  | ---------------------------------------------------------------------------------------

|For the quarterly period ended
December 31, 2001


OR
|-----------------------------------------------------

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

|For the transition period from
__________ to ___________


Commission file number:
333-59109


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

|Delaware
(State or other jurisdiction ofincorporation or organization)   | 22-3520840
(I.R.S. employer identification No.)
|------------------------------------------------------------------------ | -----------------------------------------------
|                                                                        
|198 Green Pond RoadRockaway, NJ
(Address of principal executive offices) | 07866(Zip code)                                

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



Not Applicable 
(Former
name, former address and former fiscal year, if changed since last report)



Indicate
by check X 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 [ ]


As of
February 7, 2002, 2,001,250 shares, $.001 Par value per share, of Able Energy, Inc. were
issued and outstanding.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|TABLE OF CONTENTS


PART I - FINANCIAL
INFORMATION


ITEM 1 - FINANCIAL
STATEMENTS (UNAUDITED)
|----------------------------------------------------------------------------------------------

|                                                            | 
|----------------------------------------------------------- | 
|Consolidated Balance Sheets as of June 30, 2001 and         | 
|December 31, 2001                                           | 
|                                                           
|Consolidated Statements of Operations for the three and six | 
|months ended December 31, 2001 and December 31, 2000        | 
|                                                           
|Consolidated Statement of Stockholders Equity six months   | 
|ended December 31, 2001                                     | 
|                                                           
|Consolidated Statements of Cash Flow for the six months     | 
|ended December 31, 2001 and 2000                            | 
|                                                           
|Notes to Unaudited Financial Statements                     | 

|ABLE ENERGY, INC. AND
SUBSIDIARIES


CONSOLIDATED BALANCE
SHEET


ASSETS
|------------------------------------------------------------------------

|                                                                  | December 31,2001(Unaudited) | June 30,2001(Audited)
|----------------------------------------------------------------- | --------------------------- | ---------------------
|                                                                  |                             |                      
|Current Assets:                                                   |                             |                      
|Cash                                                              |                             | $     272,478        
|Restricted Cash                                                   |                             |                     
|Accounts Receivable (Less Allowance for Doubtful                  |                            
|Accounts of ($209,927) at December 31 and June 30, 2001           |                             | 2,108,520            
|Inventory                                                         |                             | 664,642              
|Notes Receivable - Current Portion                                |                             | 30,747               
|Miscellaneous Receivable                                          |                             | 35,864               
|Prepaid Expense                                                   |                             | 266,903              
|Prepaid Expense - Income Taxes                                    |                             | 2,733                
|Deferred Income Tax                                               |                             | 58,730               
|Due From Officer                                                  |                             | 44,690               
|                                                                  |                             |                      
|Total Current Assets                                              |                             | 3,485,307            
|                                                                  |                             |                      
|                                                                 
|Property and Equipment:                                           |                            
|Land                                                              |                             | 451,925              
|Building                                                          |                             | 1,096,046            
|Trucks                                                            |                             | 2,859,695            
|Fuel Tanks                                                        |                             | 1,176,973            
|Machinery and Equipment                                           |                             | 514,590              
|Leasehold Improvements                                            |                             | 539,598              
|Cylinders                                                         |                             | 631,525              
|Office Furniture and Equipment                                    |                             | 185,402              
|Website Development Costs                                         |                             | 2,200,511            
|                                                                  |                             |                      
|                                                                  |                             | 9,656,265            
|                                                                  |                             |                      
|Less: Accumulated Depreciation and Amortization                   |                             | 2,887,629            
|                                                                  |                             |                      
|Net Property and Equipment                                        |                             | 6,768,636            
|                                                                  |                             |                      
|                                                                 
|Other Assets:                                                     |                            
|Deposits                                                          |                             | 123,591              
|Notes Receivable - Less Current Portion                           |                             | 220,759              
|Customer List, Less Accumulated Amortization of ($188,122)        |                            
|December 31, 2001 and  ($188,122) June 30, 2001                   |                             | 422,728              
|Covenant Not to Compete, Less Accumulated Amortization of         |                            
|($230,234) December 31, 2001 and  ($210,193) June 30, 2001        |                             | 53,333               
|Development Costs - Franchising, Less Accumulated Amortization of |                            
|(($4,596) December 31, 2001 and  ($0.00) June 30, 2001            |                             | 41,359               
|                                                                  |                             |                      
|Total Other Assets                                                |                             | 861,770              
|                                                                  |                             |                      
|                                                                 
|Total Assets                                                      |                             | $11,115,713          
|                                                                  |                             |                      

|See Accompanying Notes


3
|--------------------------

|ABLE ENERGY, INC. AND
SUBSIDIARIES


CONSOLIDATED BALANCE
SHEET (Contd)


LIABILITIES & STOCKHOLDERS
EQUITY
|-------------------------------------------------------------------------------------------------------------

|                                                       | December 31,2001(Unaudited) | June 30,2001(Audited)
|------------------------------------------------------ | --------------------------- | ---------------------
|                                                       |                             |                      
|Current Liabilities:                                   |                             |                      
|Accounts Payable                                       |                             | $   1,367,564        
|Note Payable - Bank                                    |                             | 725,000              
|Note Payable - Other                                   |                             | 500,000              
|Current Portion of Long-Term Debt                      |                             | 548,333              
|Accrued Expenses                                       |                             | 337,461              
|Accrued Taxes                                          |                             | 30,969               
|Customer Pre-Purchase Payments                         |                             | 1,578,272            
|Customer Credit Balances                               |                             | 418,027              
|Escrow Deposits                                        |                             | 86,037               
|                                                       |                             |                      
|Total Current Liabilities                              |                             | 5,591,663            
|                                                      
|Deferred Income                                        |                             | 79,679               
|Deferred Income Taxes                                  |                             | 56,476               
|Long Term Debt: Less Current Portion                   |                             | 1,642,205            
|                                                       |                             |                      
|Total Liabilities                                      |                             | 7,370,023            
|                                                       |                             |                      
|                                                      
|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 2,001,250 Shares December 31, 2001,    |                            
|2,000,000 Shares June 30, 2001                         |                             | 2,002                
|Paid in Surplus                                        |                             | 5,666,836            
|Retained Earnings (Deficit)                            |                             | (1,923,148           
|                                                       |                             |                      
|Total Stockholders Equity                             |                             | 3,745,690            
|                                                       |                             |                      
|Total Liabilities and Stockholders Equity             |                             | $ 11,115,713         
|                                                       |                             |                      

|See Accompanying Notes


4
|--------------------------

|ABLE ENERGY, INC. AND
SUBSIDIARIES


CONSOLIDATED STATEMENT
OF OPERATIONS


(UNAUDITED)
|---------------------------------------------------------------------------------------

|                                                | Three Months December 31, | Six Months Ended December 31,
|----------------------------------------------- | ------------------------- | -----------------------------
|
|                                                |                           |                              
|Net Sales                                       |                           | $ 7,301,452                  
|                                               
|Cost of Sales                                   |                           | 5,724,546                    
|                                                |                           |                              
|                                               
|Gross Profit                                    |                           | 1,576,906                    
|                                                |                           |                              
|                                               
|Expenses                                        |                          
|Selling, General and Administrative Expenses    |                           | 1,352,181                    
|Depreciation and Amortization Expense           |                           | 269,586                      
|                                                |                           |                              
|Total Expenses                                  |                           | 1,621,767                    
|                                                |                           |                              
|                                               
|Income (Loss) From Operations                   |                           | (44,867                      
|                                                |                           |                              
|                                               
|Other Income (Expenses):                        |                          
|Interest and Other Income                       |                           | 41,099                       
|Interest Expense                                |                           | (60,758                      
|                                                |                           |                              
|Total Other Income (Expenses)                   |                           | (19,659                      
|                                                |                           |                              
|                                               
|Income (Loss) Before Provision for Income Taxes |                           | (64,520                      
|                                               
|Provision (Reduction) for Income Taxes          |                           | 1,775                        
|                                                |                           |                              
|                                               
|Net Income (Loss)                               |                           | $   (66,295                  
|                                                |                           |                              
|                                               
|Basic Income (Loss) Per Common Share            |                           | $         (.03               
|                                                |                           |                              
|Diluted Income (Loss) Per Common Share          |                           | $         (.03               
|                                                |                           |                              
|Weighted Average Number of Common Shares        |                          
|Outstanding - Used in Basic                     |                           | 2,000,613                    
|                                                |                           |                              
|Weighted Average Number of Common Shares        |                          
|Outstanding - Used in Diluted                   |                           | 2,000,613                    
|                                                |                           |                              

|See Accompanying Notes


5
|--------------------------

|ABLE ENERGY, INC. AND
SUBSIDIARIES


CONSOLIDATED STATEMENT
OF CHANGES IN STOCKHOLDERS EQUITY


SIX MONTHS ENDED
DECEMBER 31, 2001



UNAUDITED
|------------------------------------------------------------------------------------------------------------------------------------------------

|                            |  | Common Stock.001 Par Value |  |        | 
|--------------------------- |  | -------------------------- |  | ------ | 
|
|                            |  |                            |  |        | 
|Balance - July 1, 2001      |  | 2,000,000                  |  | $2,000 | 
|                            |  |                            |  |        | 
|Shares Issued               |  | 1,250                      |  | 2      | 
|Net Loss                    |  |                           |  |       | 
|                            |  |                            |  |        | 
|Balance - December 31, 2001 |  | 2,001,250                  |  | $2,002 | 
|                            |  |                            |  |        | 

|See Accompanying Notes



6
|---------------------------

|ABLE ENERGY, INC. AND
SUBSIDIARIES


CONSOLIDATED STATEMENT
OF CASH FLOW


(UNAUDITED)
|--------------------------------------------------------------------------------------

|                                                 | SIX MONTHS ENDED DECEMBER 31
UNAUDITED
|------------------------------------------------ | --------------------------------------
|
|Cash Flow From Operating Activities              |                                       
|Net  (Loss) - Continuing Operations              |                                       
|Adjustments to Reconcile Net Income to Net Cash  |                                       
|used by Operating Activities:                    |                                       
|Depreciation and Amortization                    |                                       
|Gain on Disposal of Equipment                    |                                       
|(Increase) Decrease in:                          |                                       
|Accounts Receivable                              |                                       
|Inventory                                        |                                       
|Prepaid Expenses                                 |                                       
|Deposits                                         |                                       
|Deferred Income Tax - Asset                      |                                       
|Increase (Decrease) in:                          |                                       
|Accounts Payable                                 |                                       
|Accrued Expenses                                 |                                       
|Customer Advance Payments                        |                                       
|Payroll Taxes Payable                            |                                       
|Customer Credit Balance                          |                                       
|Deferred Income Taxes                            |                                       
|Escrow Deposits                                  |                                       
|Deferred Income                                  |                                       
|                                                
|Net Cash (Used) Provided by Operating Activities |                                       
|Cash Flow From Investing Activities              |                                       
|Purchase of Property and Equipment               |                                       
|Web Site Development Costs                       |                                       
|Increase in Deposits                             |                                       
|Sale of Equipment                                |                                       
|Notes Receivable - Sale of Equipment             |                                       
|Payment on Notes Receivable - Sale of Equipment  |                                       
|Note Receivable - Montgomery                     |                                       
|Other Receivables                                |                                       
|                                                 |                                       
|Net Cash (Used) Provided By Investing Activities |                                       
|                                                 |                                       
|                                                 |                                       

|See Accompanying Notes


7
|--------------------------

|ABLE ENERGY, INC. AND
SUBSIDIARIES


CONSOLIDATED STATEMENT
OF CASH FLOW (CONTD)


(UNAUDITED)
|-----------------------------------------------------------------------------------------------

|                                                 | SIX MONTHS ENDED DECEMBER31UNAUDITED
|------------------------------------------------ | ------------------------------------
|
|                                                 |                                     
|Cash Flow From Financing Activities              |                                     
|Increase in Notes Payable                        |                                     
|(Decrease) Increase in Notes Payable             |                                     
|Decrease in Long-Term Debt                       |                                     
|Increase in Long-Term Debt                       |                                     
|Decrease Escrow Deposit Payable                  |                                     
|Sale of Common Stock                             |                                     
|                                                 |                                     
|Net Cash (Used) Provided By Financing Activities |                                     
|                                                 |                                     
|                                                
|Net (Decrease) Increase In Cash                  |                                     
|Cash - Beginning of Year                         |                                     
|                                                 |                                     
|Cash - End of Year                               |                                     
|                                                 |                                     
|                                                
|The Company had Interest Cash Expenditures of:   |                                     
|The Company had Tax Cash Expenditures of:        |                                     

|See Accompanying Notes


8
|--------------------------

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS


JUNE 30, 2001 AND
DECEMBER 31, 2001
|---------------------------------------------------------------------------------------------------------------------

|Note 1 |  | Summary of Significant Accounting Policies
|------ |  | ------------------------------------------

| | Consolidation
and Basis of Presentation
| | ---------------------------------------

| | Change
of Fiscal Year End: The board of Directors has 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 was the 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 8 and 13).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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
December 31, 2001 is $504,929, (See Notes 8 and 13).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
consolidated interim financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information presented not
misleading.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These
statements reflect all adjustments, consisting of normal recurring adjustments, which, in
the opinion of management, are necessary for fair presentation of the information
contained therein. It is suggested that these consolidated financial statements be read
in conjunction with the financial statements and notes thereto included in the Companys
annual report for the year ended June 30, 2001. The Company follows the same accounting
policies in preparation of interim reports.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9
|-

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 1 |  | Summary of Significant Accounting Policies (contd)
|------ |  | ---------------------------------------------------

| | Results
of operations for the interim periods are not indicative of annual results.
| | -----------------------------------------------------------------------------------

| | 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 December 31, 2001 and 2000
amounted to $327,043 and $274,018, 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 1 |  | Summary of Significant Accounting Policies (contd)
|------ |  | ---------------------------------------------------

| | Web
Site Development Costs
| | --------------------------

| | Costs
of $2,200,511 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 December 31, 2001 and 2000 amounted to $216,127 and $102,398,
respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 December 31, 2001 and 2000
are $24,637 and $41,388, respectively. The covenant Not To Compete with Connells Fuel
Oil Company ended in October 2001, and was fully amortized.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
July 2001, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS
142). SFAS 142 requires goodwill and other intangible assets to be tested for impairment
under certain circumstances, and written off when impaired, rather than being amortized
as previous standards required, as such, effective July 1, 2001, the Customer List will
no longer be amortized for financial statement purposes.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 1 |  | Summary
of Significant Accounting Policies (contd)
|------ |  | ---------------------------------------------------

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 $256,782. 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 $228,507 and $286,526 for the six months ended December 31,
2001 and 2000, respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair
Value of Financial Instruments
| | -----------------------------------

| | Carrying
amounts of certain of the Companys financial instruments, including cash and cash
equivalents, accrued compensation, and other accrued liabilities, approximate fair value
because of their short maturities.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 1 |  | Summary
of Significant Accounting Policies (contd)
|------ |  | ---------------------------------------------------

| | 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 do not exceed one year.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Computation
of Net Income (Loss) per Share
| | ------------------------------------------

| | Basic
net income (loss) per share is computed using the weighted-average number of common
shares outstanding during the period. Diluted net income per share is computed using the
weighted-average number of common and dilutive potential common shares outstanding during
the period. Diluted net loss per share is computed using the weighted-average number of
common shares and excludes dilutive potential common shares outstanding, as their effect
is antidilutive. Dilutive potential common shares primarily consist of employee stock
options.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Impairment
of Long-Lived Assets
| | -------------------------------

| | Long-lived
assets to be held and used are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be recoverable.
Measurement of an impairment loss for long-lived assets that management expects to hold
and use is based on the fair value of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less costs to sell.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Recent
Accounting Pronouncements
| | --------------------------------

| | In
June 2001, FASB approved two new pronouncements: SFAS No. 141, Business Combinations,
and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 applies to all
business combinations with a closing date after June 30, 2001. This Statement eliminates
the pooling-of-interests method of accounting and further clarifies the criteria for
recognition of intangible assets separately from goodwill.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SFAS
No. 142 eliminates the amortization of goodwill and indefinite-lived intangible assets
and initiates an annual review for impairment. Identifiable intangible assets with a
determinable useful life will continue to be amortized. The amortization provisions apply
to goodwill and other intangible assets acquired after June 30, 2001. Goodwill and other
intangible assets acquired prior to June 30, 2001 will be affected upon adoption. The
Company has adopted SFAS No. 142 effective July 1, 2001, which will require the Company
to cease amortization of its remaining net customer lists balance and to perform an
impairment test of its existing customer lists and any other intangible assets based on a
fair value concept.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 1 |  | Summary
of Significant Accounting Policies (contd)
|------ |  | ---------------------------------------------------

| | Recent
Accounting Pronouncements (contd)
| | -----------------------------------------

| | The
Company has reviewed the provisions of these Statements, it is managements assessment
that customer lists impairment will not result upon adoption. As of June 30, 2001, the
Company has net unmerited customer lists of $422,728. Amortization expense of the
customer list was $20,125 for the six-month short year ended June 30, 2001 and $42,052
for the full year ended December 31, 2000.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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. In September 2001, $15,124.97 was received covering payments from
December 2000 through October 2001, representing interest of $14,804.13 and
principal of $320.84
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 12 Months EndingDecember 31, |         | Principal Amount
| | ------------------------------------ | ------- | ----------------
| |                                      | 2002    |                 
| |                                      | 2003    |                 
| |                                      | 2004    |                 
| |                                      | 2005    |                 
| |                                      | 2006    |                 
| |                                      | Balance |                 
| |                                      |         |                 
| |                                      | Total   |                 

|14
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 2 |  | Notes Receivable (contd)
|------ |  | -------------------------

| |  | 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 12 Months EndingDecember 31, |         | Principal Amount
| | ------------------------------------ | ------- | ----------------
| |                                      | 2002    |                 
| |                                      | 2003    |                 
| |                                      | 2004    |                 
| |                                      | 2005    |                 
| |                                      | 2006    |                 
| |                                      | Balance |                 
| |                                      |         |                 
| |                                      | Total   |                 

|Note 3 |  | Inventories
|------ |  | -----------

|Items              | December 31,2001 | June 30,2001 | 
|------------------ | ---------------- | ------------ | 
|                   |                  |              | 
|Heating Oil        |                  | $412,510     | 
|Diesel Fuel        |                  | 23,730       | 
|Kerosene           |                  | 10,374       | 
|Propane            |                  | 6,889        | 
|Parts and Supplies |                  | 211,139      | 
|                   |                  |              | 
|Total              |                  | $664,642     | 
|                   |                  |              | 

|Note 4 |  | Notes
Payable Bank
|------ |  | ------------------

| | On
October 22, 2001, the Company and its subsidiaries, either as Borrower or Guarantor,
entered into a loan and security Agreement with Fleet National Bank. The bank is
providing the following credit facility.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
borrowing base of 75% of Eligible Accounts Receivable, as defined in the Agreement, plus
$500,000 against the value of the Companys customer list, for a total amount of
$1,500,000. The revolving credit may also be used for Letters of Credit, with the
lenders approval.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 4 |  | Notes
Payable Bank (contd)
|------ |  | ---------------------------

| | 
| | 

| | The
Letters of Credit will have an annual fee of 1.25% of the face value of each Letter of
Credit. The applicable interest rate on the revolving credit advances will be the banks
prime rate or Libor interest rate, plus 2.75%. Interest is to be paid on the amount
advanced on the last day of each month.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
security for the performance of this Agreement, the other Loan Documents and the payment
of the Liabilities, each Borrower and Guarantor grants, pledges and assigns to Lender a
security interest in all assets of such Borrower or Guarantor, whether now owned or
hereafter acquired including, without limitation, (a) all Accounts, Goods, Chattel Paper,
Equipment, Documents, Deposits, Instruments, General Intangibles and Payment Intangibles
(including, but not limited to, any and all interests in trademarks, service marks,
patents, licenses, permits, and copyrights), (b) all inventory of Borrowers, if any, held
by any Borrowers for sale or lease or to be furnished under contracts of service, (c) all
Books and Records, (d) any Account maintained by any Borrower with Lender and all cash
held therein, and (e) all proceeds and products of the foregoing, including casualty
insurance thereon (collectively, the "Collateral").
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Agreement provides for covenants as follows:
| | ------------------------------------------------

| |  | 1. |  | Use
of proceeds only for Working Capital, Letters of Credit and for acquisitions with
Lenders prior written consent.
| |  | -- |  | ---------------------------------------------------------------------------------------------------------------------

| |  | 2. |  | Financial
information to be furnished either annually, quarterly or monthly.
| |  | -- |  | ----------------------------------------------------------------------------

| |  | 3. |  | Financial
covenants to be tested as of the end of each fiscal quarter.
| |  | -- |  | ----------------------------------------------------------------------

| |  | 4. |  | Limitations
on loans and investments.
| |  | -- |  | -------------------------------------

| |  | 5. |  | Compliance
with laws and environmental matters.
| |  | -- |  | -----------------------------------------------

| |  | 6. |  | Limitations
on Borrowing.
| |  | -- |  | -------------------------

| |  | 7. |  | Cannot
declare or pay any dividends.
| |  | -- |  | ------------------------------------

| | All
of the above and other items as per article VI of the Agreement. The Agreement has a
current expiration date of November 30, 2002.
| | --------------------------------------------------------------------------------------------------------------------------------------

| | The
Agreement with Able Oil Company and PNC Bank, dated August 11, 1999, was amended July 14,
2000. The term was extended from June 30, 2001 to September 29, 2001. The loan was paid
in full effective September 29, 2001. The banking relation was terminated and all
collateral was being released by PNC Bank.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 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 was $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 Horicon Avenue, Town of
Warrensburg, Warren County, New York. The balance due on this Note at December 31, 2001
was $120,148.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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. Based upon an amendment, dated
November 5, 2001, and commencing with interest due December 1, 2001, interest will be
paid at the rate of 8.25% on the principal sum of $650,000. Only interest is required to
be paid and the principal is due on July 31, 2004 (See Note 10).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|17
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 7 |  | 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 Continuing
Operation is accounted for as follows:
| | ---------------------------------------------------------------------------------------------------------------------------

|                             | 2001
|---------------------------- | ----
|
|                             |     
|Statutory Federal Income Tax |     
|State Income Tax             |     
|                             |     
|Income Taxes                 |     
|                             |     
|Income Taxes consists of:    |     
|Current                      |     
|Deferred                     |     
|                             |     
|Total                        |     
|                             |     
|                             |     

|                             | 2000
|---------------------------- | ----
|
|                             |     
|Statutory Federal Income Tax |     
|State Income Tax             |     
|                             |     
|Income Taxes                 |     
|                             |     
|Income Taxes consist of:     |     
|Current                      |     
|Deferred                     |     
|                             |     
|Total                        |     
|                             |     

|18
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENT (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|---------------------------------------------------------------------------------------------------------------------------------------

|Note 7 |  | 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:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | December 31, 2001
|------------------------------- | -----------------
|
|                                |                  
|Depreciation                    |                  
|Allowance for Doubtful Accounts |                  
|Gain on Sale of Subsidiary      |                  

|                                | June 30, 2001
|------------------------------- | -------------
|
|                                |              
|Depreciation                    |              
|Allowance for Doubtful Accounts |              
|Gain on Sale of Subsidiary      |              

| | 
| | 

| | Able
energy, Inc., et al, open years are December 31, 1998, 1999, 2000 and June 30, 2001. The
Company has a net operating loss carry forward of approximately $1,360,000. The net
operating loss expires between June 30, 2019 and 2021.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These
carry forward losses are available to offset future taxable income, if any. The Companys
utilization of this carry forward against future taxable income is subject to the Company
having profitable operations or sale of Company assets, which create taxable income. At
this time, the Company believes that a full valuation allowance should be provided. The
component of the deferred tax asset as of December 31, 2001 is as follows:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                              | 
|--------------------------------------------- | 
|Net Operating Loss Carry forward - Tax Effect | 
|Valuation Allowance                           | 
|                                              | 
|                                              | 
|Net Deferred Tax based upon Net               | 
|Operating Loss Carry forward                  | 
|                                              | 
|                                              | 

|19
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

|Note 8 |  | Note
Receivable - Subsidiary
|------ |  | ----------------------------

| | The
Company has a Note Receivable from PriceEnergy.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 payable
quarterly. Principal payments to begin two years after the date of the Note, November 1,
2002. Interest, in the amount of $54,000 has been accrued for the six months ended
December 31, 2001. Unpaid accrued interest due through December 31, 2001 is $126,000. The
Note, accrued interest and interest expense have been eliminated in the consolidated
financial statements (See Notes 1 and 13).
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 $19,502 (2001) and $13,795 (2000), for the six months
ended December 31, respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 10 |  | 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.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Able
Oil Company is under contract to purchase #2 oil as follows:
| | -----------------------------------------------------------------

|Company         | Period | Total Gallons    | Gallons in 2002 | Open DollarCommitment at12/31/01
|--------------- | ------ | ---------------- | --------------- | --------------------------------
|                |        |                  |                 |                                 
|Conectiv Energy |        | 9/1/01 - 8/31/02 |                 | 504,000                         
|Conectiv Energy |        | 10/1/01-3/31/02  |                 | 1,008,000                       
|Amerada Hess    |        | 10/1/01-3/31/02  |                 | 798,000                         
|                |        |                  |                 |                                 
|Totals          |        |                  |                 | 2,310,000                       
|                |        |                  |                 |                                 

| | Able
Oil Company is also under contract with Conectiv Energy to purchase Low Sulfur Diesel
Fuel for the period October 2001 through April 2002. The total is 294,000 gallons.
168,000 gallons in the year 2002, and an open purchase commitment of $131,181.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|20
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 10 |  | Commitments
and Contingencies (contd)
|------- |  | --------------------------------------

| | Able
Energy New York, Inc. is under contract to purchase #2 oil from Sprague Energy
Corporation during the period October 2001 through March 2002. The total is 252,000
gallons. 126,000 gallons are committed in the year 2002 for a total cost of $100,779.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Able
Propane, LLC is under contract with Propane Power Corporation to purchase propane gas for
the period November 2001 through February 2002. The total is 168,000 gallons. 84,000
gallons are committed in the year 2002 for a total cost of $53,449.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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. There is a current agreement not finalized to increase
this amount to $450,000. 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 original agreement, the Estate
receives 50% of the settlement amount, net of attorney fees. This has been amended by an
agreement dated November 5, 2001. The entire settlement, net of attorney fees, will be
placed in an attorneys escrow account for payment of all investigation and remediation
costs.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 10 |  | Commitments
and Contingencies (contd)
|------- |  | --------------------------------------

| | 
| | 

| | PriceEnergy.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.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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. On January 11, 2002, Price
Energy and ThinkSpark agreed to settle their dispute. Price Energy will pay ThinkSpark
$30,000 and there will be mutual releases of all claims as well as dismissals of the
pending actions in New Jersey and Texas. Counsel is currently discussing the form of the
settlement and releases. The liability has been reduced to $30,000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 11 |  | 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.
| | ----------------------------------------------------------------------------------------------------------------------------------

|22
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)



JUNE 30, 2001 AND
DECEMBER 31, 2001
|-------------------------------------------------------------------------------------------------------------------------------

|Note 11 |  | Operating
Lease (contd)
|------- |  | ------------------------

| | 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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 $60,649 for the six months ended December 31, 2001. The estimated future rents are as
follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Year Ended June 30, | 
|------------------- | 
|                    | 
|2002                | 
|2003                | 
|2004-2006           | 
|                    | 
|Total               | 
|                    | 
|                    | 

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

| |                     
| | --------------------
| | Able Oil Melbourne  
| |                     
| | Able Energy New York
| |                     

|Note 12 |  | 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.
| |  |  |  | -- |  | --------------------------------------------------------------

| | The
non-refundable fee of $25,000 has been recorded as Other Income in the period ended
December 31, 2001.
| | ----------------------------------------------------------------------------------------------------------

|23
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 13 |  | 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_% 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
| | President              

| | No
capital contributions have been made by these officers (See Notes 1 and 8).
| | ------------------------------------------------------------------------------

|Note 14 |  | Earnings
Per Share
|------- |  | ------------------

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

|                                              | December 31,2001 | June 30,2001
|--------------------------------------------- | ---------------- | ------------
|                                              |                  |             
|Weighted Average of Common Shares Outstanding |                  | 2,000,613   
|Dilutive Effect of:                           |                 
|Employee Stock Options                        |                  |            
|Stock Warrants                                |                  |            
|                                              |                  |             
|Weighted Average Common Shares Outstanding    |                  | 2,000,613   
|                                              |                  |             

| | The
dilutive potential common shares that were antidilutive at December 31, 2001 amounted to
56,841 Shares.
| | -----------------------------------------------------------------------------------------------------------

|Note 15 |  | 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.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

|24
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)


JUNE 30, 2001 AND
DECEMBER 31, 2001
|------------------------------------------------------------------------------------------------------------------------------

|Note 15 |  | Stock
Option Plans (contd)
|------- |  | ---------------------------

|                  | Number ofShares | ExercisePrice | Term
|----------------- | --------------- | ------------- | ----
|                  |                 |               |     
|January 6, 2000   |                 |               |     
|Grants            |                 | 56,000        |     
|Exercises         |                 | 0             |     
|                 
|December 1, 2000  |                 |               |     
|Grants            |                 | 48,090        |     
|Exercises         |                 | 1,250         |     
|                 
|December 21, 2000 |                 |               |     
|Grants            |                 | 60,000        |     
|Exercises         |                 | 0             |     
|                 
|Grants            |                 | 24,000        |     
|Exercises         |                 | 0             |     

|Note 16 |  | 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
40,000 warrants to purchase shares of common stock were outstanding during the fourth
quarter of 2001 and were included in the computation of diluted EPS as the warrants
exercise price was less than the average market price of the common stock, which was
$4.16 for the quarter ended December 31, 2001. Due to the Companys Net Loss, the
computation would be antidilutive (See Note 14).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|25
|--

|ABLE ENERGY, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (Contd)



JUNE 30, 2001 AND
DECEMBER 31, 2001
|-------------------------------------------------------------------------------------------------------------------------------

|Note 17 |  | Compensated
Absences
|------- |  | --------------------

| | There
has been no liability accrued for compensated absences; as in accordance with Company
policy all compensated absences, accrued vacation and sick payment must be used by
December 31st.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|26
|--

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

|ITEM 2 |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------ |  | -------------------------------------------------------------------------------------

| | Statements
in this Quarterly Report on Form 10-QSB 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 do not exceed one year.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Results
of Operations
| | ---------------------

| | Six
months ended December 31, 2001, compared to the six months ended December 31, 2000.
| | ---------------------------------------------------------------------------------------

| | The
Company reported revenues of $12,568,749 for the six months ended December 31, 2001, a
decrease of 20.27% over the prior years revenues for the same six-month period. This
decrease can be attributed primarily to a decrease in the cost of product (mainly home
heating oil) and the resulting lower retail sales price, which was sold by the Company
below the price of the prior year.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Gross
profit margin, as a percentage of revenues, for the six months ended December 31, 2001,
increased to 16.90% from 13.24%. For the quarter ended December 31, 2001 the Gross Profit
increased to 21.60% from 15.00%. The increase in margin is primarily
a result of the Companys new policy to maximize margins on the products it sells and to
hold a minimum margin.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | Selling,
General and Administrative expenses decreased by $184,541, or 6.71%, from $2,751,279 for
the six months ended December 31, 2000 to $2,566,738 for the six months ended December
31, 2001. This decrease was achieved even with the operations of a new subsidiary, Price
Energy.Com that began operations in October 2000, having salaries, advertising and
computer consulting costs of approximately $143,000 for the three months ended September
30, 2001. The lower costs resulted from a decrease in repairs and consulting fees.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Operating
loss for the six months ended December 31, 2001 was $1,010,388, a decrease of 6.57% over
the Companys operating loss of $1,081,472 for the six months ended December 31, 2000.
The Operating Loss for the quarter ended December 31, 2001 decreased to $44,867 from
$381,231 for the quarter ended December 31, 2000. This decreased operating loss was
directly attributable to the lower SG & Aexpenses and sales at higher margins in the
quarter ended December 31, 2001.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
loss for the six months ended December 31, 2001 increased by $126,069, or 14.15%, to
$1,017,305 as compared to the same period for the previous year loss of $891,236. This
net loss was the result of a new subsidiary, Price Energy with a six-month loss of
$504,929 and three months ended September loss of $276,716. The subsidiary began
operations in October 2000. Other causes for the net loss were warmer summer weather and
a lower gross margin in the quarters ended September 2001 and decrease of interest
income. The Company had a profit of $161,918 for the three months ended December 31, 2001
without its subsidiary, PriceEnergy.com, Inc.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Operational
Efficiency
| | ----------------------

| | The
Company believes that it can significantly increase utilization of existing personnel and
equipment, thereby reducing expenses and increasing profitability, within its current
business configuration.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
September of 2001, the Company implemented a new margin management policy and system
designed to increase profitability without sacrificing customer appeal. The Company
believes that there is value to the products and services that it provides to its
consumers in varying levels based upon the specific needs of the consumer and the
products provided. Within the new margin matrix that the Company has implemented, product
pricing will be in line with the level of service and specific product packages provided
to the consumer. For those consumers
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | requiring
more in depth or full-service prices will be reflected appropriately for those services
provided. The Company has begun to realize positive results of its new margin management
in this quarter.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | This
is evidenced by an increase in gross profit from 15% to 21.6% for the months of October
through December 2001 vs. 2000. The Company believes that this trend of increasing gross
profit will continue through the remaining two quarters.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Recently
Implemented Technological Procedures
| | ---------------------------------------------

| | The
Company has established goals, which will be accomplished through the implementation of
some modern technologies that are currently being installed into the Companys existing
infrastructure.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company believes, in the current down economy, that it can significantly increase its
ability to provide superior customer service from its Rockaway Call Center while at the
same time operating its administration more efficiently through the use of Customer
Relationship Management software. By utilizing existing telephony hardware and in-house
management, the Companys call center environment will be provided with the ability to
respond to changing call patterns, both higher and lower, without the expense of
overstaffing to meet unrealized needs. Full implementation and integration of this
software will be completed by the end of the third quarter.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Companys full implementation of the previously announced Automated Dispatch Technology
is 75% complete as of quarter ending December 31, 2001. This technology will enable the
organization to increase the efficiency, productivity, and profitability of its equipment
service and fuel delivery dispatch systems. Within the home heating equipment service
environment, this technology is providing management with the ability to communicate with
service technicians instantaneously via wireless CDPD technology to perform billing
functions at the customers location and receive and input payment information remotely.
In addition, management will be aware of the status of every on-duty worker and provide
real time reporting for stand-by, enroute, and service work time thus maximizing
scheduling opportunities and eliminating service technician down time. Vehicles will be
equipped with GPS to track the ongoing location, ground speed, and vehicle movement
history for both service and delivery personnel. It is expected that the Company will
have full implementation of this technology on all of its service vehicles by the quarter
ending March 31, 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Liquidity
and Capital Resources
| | -------------------------------

| | For
the six-month period ended December 31, 2001, compared to the six months ended December
31, 2000, the Companys cash position decreased by $335,009 from $607,487 to $272,478.
For the year ended June 30, 2001, cash was generated through operations, collections of
customer advance payments, and increase loan from an outside individual. The primary
reason for reduction in cash was a loan and investment in PriceEnergy.com, Inc. During
the six months ended December 31, 2001, cash was generated through collection of customer
advance payments and a new credit facility with Fleet Bank.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

| | The
Company has entered into an agreement with Fleet National Bank. The bank has granted the
Company a credit facility of $1,500,000. 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.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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, most of such
revenues are derived from the sale of home heating products including propane gas and
home heating oil. The warmer weather in the quarter ended December 31, 2001 reduced the
sale of heating oil by approximately 14.3%. The heating season, September through
December, resulted in a 32% decrease in degree-days, comparing the period in the years
2001 and 2000. The Company still continued to grow its customer base in the period ended
December 31, 2001. 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II OTHER
INFORMATION
|-------------------------

|Item 1. |  | Legal Proceedings
|------- |  | -----------------

| | None.
| | -----

|Item 2. |  | Changes in Securities and Use of Proceeds
|------- |  | -----------------------------------------

| | None.
| | -----

|Item 3. |  | Defaults Upon Senior Securities
|------- |  | -------------------------------

| | None.
| | -----

|Item 4. |  | Submission of Matters to a Vote of Security Holders
|------- |  | ---------------------------------------------------

| | None.
| | -----

|Item 5. |  | Other Information
|------- |  | -----------------

| | None.
| | -----

|Item 6. |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------

| |  | (a) |  | Exhibits
| |  | --- |  | --------

| | None.
| | -----

| |  | (b) |  | Reports
on Form 8-K
| |  | --- |  | -------------------

|The
Company did not file any reports on Form 8-K during the six months ended December 31,
2001.
|-----------------------------------------------------------------------------------------------

|
|

|SIGNATURES
|----------

|Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: February 12, 2002 |  | ABLE ENERGY, INC.By: /s/ Christopher Westad       
       Christopher Westad       President
|----------------------- |  | ----------------------------------------------------------------------------------------------------------