**UNITED      STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        D.C. 20549**

**FORM        10-K**

|  x | **ANNUAL                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934** |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

**June        30, 2007**

**OR**

|  o | **TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934** |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

**0-21825**

**SMF        ENERGY CORPORATION**

| **Delaware**                                                               | **65-0707824**                                                         |
|---------------------------------------------------------------------------------|------------------------------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) | (I.R.S.                  Employer Identification                  No.) |

**200        West Cypress Creek Road, Suite 400, Fort Lauderdale, Florida        33309**

**(954)        308-4200**

|  **Title                    of Class**                            | ** Name                    of exchange on which                    registered** |
|------------------------------------------------------------------------|--------------------------------------------------------------------------------------|
| **Common                    Stock, $.01 Par                    Value** | **Nasdaq                    Capital                    Market**                      |

**None**

Noo

  o

**DOCUMENTS        INCORPORATED BY REFERENCE:**

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**CAUTIONARY        STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

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**TABLE        OF CONTENTS**

|                                                                                                                                                                                    |   | **PAGE** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
| **PART                  I.**                                                                                                                                                            |   |     |
| Item                  1.     Business                                                                                                                               |   | 1        |
| Item                  1A.  Risk Factors                                                                                                                                            |   | 8        |
| Item                  1B.  Unresolved Staff Comments                                                                                                                               |   | 10       |
| Item                  2.     Properties                                                                                                                             |   | 11       |
| Item                  3.     Legal Proceedings                                                                                                                      |   | 12       |
| Item                  4.     Submission of Matters to a Vote of Security                  Holders                                                                   |   | 12       |
|                                                                                                                                                                                    |   |     |
| **PART                  II.**                                                                                                                                                           |   |     |
| Item                  5.     Market for Common Equity, Related                  Shareholder Matters and                  Issuer Purchases of Equity Securities |   | 13       |
| Item                  6.     Selected Financial Data                                                                                                                |   | 14       |
| Item                  7.     Management’s Discussion and Analysis of                  Financial Condition and                  Results of Operations          |   | 17       |
| Item                  7A.  Quantitative and Qualitative Disclosures About Market                  Risk                                                                             |   | 36       |
| Item                  8.     Financial Statements and Supplementary                  Data                                                                           |   | 36       |
| Item                  9.     Changes in and Disagreements with Accountants                  on Accounting and                  Financial Disclosure                 |   | 36       |
| Item                  9A.  Controls and Procedures                                                                                                                                 |   | 37       |
| Item                  9B.  Other Information                                                                                                                                       |   |  38 |
|                                                                                                                                                                                    |   |     |
| **PART                  III.**                                                                                                                                                          |   |     |
| Item                  10.   Directors, Executive Officers and Corporate                  Governance                                                            |   | 39       |
| Item                  11.   Executive Compensation                                                                                                                            |   | 39       |
| Item                  12.   Security Ownership of Certain Beneficial Owners and                  Management and                  Related Stockholder Matters                  |   | 39       |
| Item                  13.   Certain Relationships, Related Transactions, and Director                  Independence                                                           |   | 39       |
| Item                  14.   Principal Accounting Fees and Services                                                                                                            |   | 39       |
|                                                                                                                                                                                    |   |     |
| **PART                  IV.**                                                                                                                                                           |   |     |
| Item                  15.   Exhibits, Financial Statement Schedules                                                                                                           |   | 40       |
| Signatures                                                                                                                                                                              |   |  46 |

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**PART      I **

**Item      1.  Business**

***Overview***

***Acquisitions***

**Shank      Services**

----

**H      & W **

***Strategy***

|   | · | market                presence; |
|--------|--------|---------------------------------|

----

|   | · | growth                potential of product and service lines; |
|--------|--------|---------------------------------------------------------------|

|   | · | margin                contribution; |
|--------|--------|-------------------------------------|

|   | · | impact                on our competition; |
|--------|--------|-------------------------------------------|

|   | · | customer                loyalty and retention; |
|--------|--------|------------------------------------------------|

|   | · | commitment                of management and other personnel; |
|--------|--------|--------------------------------------------------------------|

|   | · | integration                efficiencies and controls; and |
|--------|--------|-----------------------------------------------------------|

|   | · | transaction                financing alternatives, among others. |
|--------|--------|------------------------------------------------------------------|

***Products,      Services and Operations***

**Commercial      Mobile **
**and      Bulk**
**      Fueling**
**      and Fuel Management Services**

|   | · | *Reduced                Operating Costs and Increased Labor Productivity*.                Fleet operators are able to reduce operating costs and lower payroll                hours                by eliminating the need for their employees to fuel vehicles either                on-site or at local retail stations and other third party facilities.                Overnight fueling prepares fleet vehicles for operation at the beginning                of each workday and increases labor productivity by allowing employees                to                use their vehicles during time that would otherwise be spent fueling.                Vehicle use is maximized since fueling is conducted during non-operating                hours. The fuel necessary to operate vehicles is reduced since fueling                takes place at customer locations. The administrative burden required                to                manage fuel programs and monitor vehicle utilization is also reduced. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | *Centralized                Inventory Control and Management*.                Our fuel management system provides fleet operators with a central                management data source. Web-based comprehensive reports detail, among                other things, the location, description, fuel type and daily and                weekly                fuel consumption of each vehicle or piece of equipment that we fuel.                This                eliminates customers’ need to invest working capital to carry fuel                supplies and allows customers to centralize fuel inventory controls                as                well as track and analyze vehicle movements and fuel consumption                for                management and fuel tax reporting purposes. We are also able to service                and manage fuel delivery to a customer’s on-site storage tank, and using                our technology we can provide reports detailing fuel dispensed from                the                tank into each of the customer’s vehicles. Our system is specifically                designed for use in commercial fueling and is certified for accuracy                by                The National Conference on Weights and                Measures. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Tax                Reporting Benefits*.                Our fuel management system can track fuel consumption to specific                vehicles                and fuel tanks, providing tax reporting benefits to customers consuming                fuel in uses that are tax-exempt, such as for off-road vehicles,                government-owned vehicles and fuel used to operate refrigerator units                on                vehicles. For these uses, the customers receive reports that provide                them                with the information required to substantiate tax                exemptions. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Elimination                of Expenses and Liabilities of On-site Storage*.                Fleet operators who previously satisfied their fuel requirements                using                on-site storage tanks can eliminate the capital and costs relating                to                installing, equipping and maintaining fuel storage and dispensing                facilities, including the cost and price volatility associated with                fuel                inventories; complying with escalating environmental government                regulations; and carrying increasingly expensive insurance. By removing                on-site storage tanks and relying on commercial mobile fueling, customers                are able to avoid potential liabilities related to both employees                and                equipment in connection with fuel storage and handling. Customers’                expensive and inefficient use of business space and the diminution                of                property values associated with environmental concerns are also                eliminated. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Lower                Risk of Fuel Theft*.                Fleet operators relying on employees to fuel vehicles, whether at                on-site                facilities or at retail stations, often experience shrinkage of fuel                inventories or excess fuel purchases due to employee fraud. Our fuel                management system prevents the risk of employee theft by dispensing                fuel                only to authorized vehicles. Utilizing our fueling services, rather                than                allowing employees to purchase fuel at local retail stations, also                eliminates employee fraud due to credit card                abuse. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | *Access                to Emergency Fuel Supplies and Security*.                Emergency preparedness, including fuel availability, is critical                to the                operation of governmental agencies, utilities, communication companies,                delivery services and numerous other fleet operators. We provide                access to                emergency fuel supplies at times and locations chosen by our customers,                allowing them to react more quickly and effectively to emergency                situations, such as severe weather conditions and related disasters.                Fueling by fleet operators at their own on-site storage facilities,                and/or                at retail and other third party locations may be limited due to power                interruptions, supply outages or access and other natural limitations.                In                addition, since security concerns of fleet operators to terrorism,                hijacking and sabotage are increasing, fueling vehicles at customers’                facilities eliminates security risks to the fleet operators’ employees and                equipment rather than fueling at retail service stations and other                third                party facilities. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Packaging,      Distribution and Sale of Lubricants, Other Petroleum Products and      Chemicals**

----

**Transportation      Logistics Services**

**Emergency      Response Services**

***Operating      Equipment***

***Marketing      and Customers***

----

***Fuel      and Lubricant Supply***

***Competition***

|   | · | our                patented                proprietary electronic fuel tracking control system; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | our                reputation for timely, efficient and reliable delivery of products                and                services; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                well trained drivers and support                staff; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | our                technical knowledge of our products and our customers’ needs;                and |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | our                competitive pricing for products and services as a result of strong                business relationships with our principal                suppliers. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***Intellectual      Property***

***Employees***

***Governmental      Regulation***

***Available      Information***

----

**Item      1A. Risk Factors**

**CERTAIN      FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS **

***No      Assurances of Future Profitability; Losses from Operations; Need for Capital.***

***Trading      Market for Our Common Stock.***

***Growth      Dependent Upon Future Expansion; Risks Associated With Expansion into New      Markets.***

***Acquisition      Availability; Integrating Acquisitions. ***

----

***Need      to Maintain Effective Internal Controls.***

***Dependence      on Key Personnel***
*. *

***Fuel      Pricing and Supply Availability; Effect on      Profitability***
*.      *

***Risks      Associated with Customer Concentration; Absence of Written Agreements.***

***Management      of Growth; Accounting and Information Technology Systems Implementation.***

----

***Competition.***

***Operating      Risks May Not Be Covered by Insurance.***

***Governmental      Regulation.***

***Changes      in Environmental Requirements***
*.      *

***Terrorism      and Warfare in the Middle East May Adversely Affect the Economy and the Price      and Availability of Petroleum Products.***

**Item      1B. Unresolved Staff Comments**

----

**Item      2. Properties**

** **

| ** ****Location**                  |   | **Lease                Expiration** |
|-----------------------------------------|--------|-------------------------------------|
| Gardena,                California      |   | 7/15/09                             |
| Bloomington,                California  |   | 7/15/10                             |
| Port                Everglades, Florida |   | 5/31/08                             |
| Orlando,                Florida         |   | 11/1/09                             |
| Doraville,                Georgia       |   | 1/1/08                              |
| Houston,                Texas           |   | 9/30/10                             |
| Ft.                Worth, Texas         |   | 12/31/07                            |
| Jacksonville,                Florida    |   | 8/31/15                             |
| Atlanta,                Georgia         |   | 12/31/07                            |
| Freeport,                Texas          |   | 9/30/10                             |
| Waxahachie,                Texas        |   | 9/30/10                             |
| Converse,                Texas          |   | 9/30/07                             |
| Lufkin,                Texas            |   | 9/30/10                             |
| Temple,                Texas            |   | 12/31/08                            |
| Gonzales,                LA             |   | 8/15/07                             |

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**Item      3.  Legal Proceedings **

**Item      4.  Submission of Matters to a Vote of Security      Holders**

----

**PART      II**

**Item      5.  Market for Common Equity, Related Shareholder Matters and Issuer      Purchases of Equity Securities**

|                                        |   | **Common                Stock** |   |
|---------------------------------------------|--------|---------------------------------|--------|
|                                        |   | **High**                        |   | **Low** |   |
|                                        |   |                            |   |   |   |
| **Year                Ended June 30, 2007** |   |                            |   |   |   |
| 1st                quarter                  |   | $                               | 3.42   |   | $ | 1.90 |   |
| 2nd                quarter                  |   | $                               | 1.90   |   | $ | 1.35 |   |
| 3rd                quarter                  |   | $                               | 1.83   |   | $ | 1.46 |   |
| 4th                quarter                  |   | $                               | 2.07   |   | $ | 1.47 |   |
|                                        |   |                            |   |   |   |   |   |
| **Year                Ended June 30, 2006** |   |                            |   |   |   |   |   |
| 1st                quarter                  |   | $                               | 5.55   |   | $ | 1.90 |   |
| 2nd                quarter                  |   | $                               | 4.00   |   | $ | 2.35 |   |
| 3rd                quarter                  |   | $                               | 3.45   |   | $ | 2.50 |   |
| 4th                quarter                  |   | $                               | 4.60   |   | $ | 2.24 |   |

**Performance      Graph**

|                                      |   | **Cumulative                Total Return** |      |
|-------------------------------------------|--------|--------------------------------------------|-----------|
|                                      |   | **June-02**                                |      | **June-03** |   | **June-04** |   | **June-05** |   | **June-06** |   | **June-07** |   |
| **Summary                Chart Input**    |   |                                       |      |   |   |   |   |   |   |   |   |   |   |
| SMF                ENERGY CORPORATION     |   |                                       | **100.0** |   |   | **89.6** |   |   | **107.2** |   |   | **174.4** |   |   | **208.0** |   |   | **119.2** |   |
| NASDAQ                STOCK MARKET (U.S.) |   |                                       | **100.0** |   |   | **110.9** |   |   | **140.0** |   |   | **140.6** |   |   | **148.4** |   |   | **177.9** |   |
| RUSSELL                2000               |   |                                       | **100.0** |   |   | **96.9** |   |   | **127.9** |   |   | **138.3** |   |   | **156.6** |   |   | **180.2** |   |

----

**Item      6.  Selected Financial Data**

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*(in      thousands, except net margin per gallon and per share data)*

|                                                                                         |   | **Year                  Ended June 30,** |    |
|----------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                         |   | **2007**                                 |    | **2006** |   | **2005** |   | **2004**                  (5) |   | **2003** |   |
| ***Selected                  Income Statement Data:***                                       |   |                                     |    |   |   |   |   |   |   |   |   |
| Total                  revenue                                                               |   | $                                        | 229,769 |   | $ | 248,699 |   | $ | 133,563 |   | $ | 89,110 |   | $ | 71,365 |   |
| Gross                  profit                                                                |   | $                                        | 12,631  |   | $ | 12,409 |   | $ | 6,588 |   | $ | 4,298 |   | $ | 4,023 |   |
| Selling,                  general and administrative expense                                 |   | $                                        | 15,836  |   | $ | 13,262 |   | $ | 6,145 |   | $ | 4,394 |   | $ | 4,716 |   |
| Operating                  (loss) income                                                     |   | $                                        | (3,205  | ) | $ | (853 | ) | $ | 443 |   | $ | 661 |   | $ | (693 | ) |
| Interest                  expense, net of interest and other income                          |   | $                                        | 3,384   |   | $ | 4,025 |   | $ | 1,903 |   | $ | 1,361 |   | $ | 915 |   |
| Net                  loss                                                                    |   | $                                        | (6,589  | ) | $ | (4,878 | ) | $ | (1,460 | ) | $ | (698 | ) | $ | (1,581 | ) |
|                                                                                         |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| ***Share                  Data:***                                                           |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Basic                  and diluted net loss per share                                        |   | $                                        | (0.57   | ) | $ | (0.50 | ) | $ | (0.19 | ) | $ | (0.10 | ) | $ | (0.22 | ) |
| Basic                  and diluted weighted average common                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |  |   |
| shares                  outstanding                                                          |   |                                     | 11,509  |   |   | 9,819 |   |   | 7,857 |   |   | 7,261 |   |   | 7,221 |   |
|                                                                                         |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| ***Selected                  Balance Sheet Data:***                                          |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Cash                  and cash equivalents                                                   |   | $                                        | 987     |   | $ | 4,103 |   | $ | 4,108 |   | $ | 2,708 |   | $ | 211 |   |
| Accounts                  receivable, net                                                    |   | $                                        | 25,442  |   | $ | 24,345 |   | $ | 14,129 |   | $ | 8,280 |   | $ | 6,113 |   |
| Restricted                  cash                                                             |   | $                                        | 1,145   |   | $ | - |   | $ | - |   | $ | - |   | $ | - |   |
| Line                  of credit payable                                                      |   | $                                        | 17,297  |   | $ | 15,612 |   | $ | 4,801 |   | $ | 4,919 |   | $ | 4,410 |   |
| Long-term                  debt (including current                                           |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |  |   |
| portion)                                                                                     |   | $                                        | 10,276  |   | $ | 13,136 |   | $ | 11,141 |   | $ | 5,558 |   | $ | 4,478 |   |
| Shareholders’                  equity                                                  |   | $                                        | 4,114   |   | $ | 5,540 |   | $ | 6,838 |   | $ | 5,348 |   | $ | 4,111 |   |
| Total                  assets                                                                |   | $                                        | 43,925  |   | $ | 48,114 |   | $ | 30,125 |   | $ | 20,018 |   | $ | 16,011 |   |
| ***Financial                  and Statistical Information:***                                |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| EBITDA                  (1)                                                                  |   | $                                        | 252     |   | $ | 1,781 |   | $ | 2,278 |   | $ | 1,983 |   | $ | 737 |   |
| Working                  capital (deficit) (2)                                               |   | $                                        | 168     |   | $ | 1,298 |   | $ | 5,861 |   | $ | 2,472 |   | $ | (2,430 | ) |
| Net                  margin (3)                                                              |   | $                                        | 14,333  |   | $ | 14,076 |   | $ | 8,055 |   | $ | 5,428 |   | $ | 5,426 |   |
| Net                  margin per gallon (in dollars) (4)                                      |   | $                                        | 0.169   |   | $ | 0.149 |   | $ | 0.121 |   | $ | 0.099 |   | $ | 0.115 |   |
| Total                  gallons                                                               |   |                                     | 84,899  |   |   | 94,261 |   |   | 66,427 |   |   | 54,594 |   |   | 47,294 |   |
|                                                                                         |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| ***Non-GAAP                  Measure Reconciliation, EBITDA                  Calculation:*** |   |                                     |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Net                  loss                                                                    |   | $                                        | (6,589  | ) | $ | (4,878 | ) | $ | (1,460 | ) | $ | (698 | ) | $ | (1,581 | ) |
| Add                  back:                                                                   |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |  |   |
| Interest                  expense, net of interest income (6)                                |   |                                     | 3,727   |   |   | 4,025 |   |   | 1,903 |   |   | 1,361 |   |   | 915 |   |
| Stock-based                  compensation expense                                            |   |                                     | 491     |   |   | 511 |   |   | - |   |   | - |   |   | - |   |
| Depreciation                  and amortization expense                                       |   |                                     | 2,623   |   |   | 2,123 |   |   | 1,835 |   |   | 1,320 |   |   | 1,403 |   |
| Subtotal                                                                                     |   |                                     | 6,841   |   |   | 6,659 |   |   | 3,738 |   |   | 2,681 |   |   | 2,318 |   |
| EBITDA                                                                                       |   | $                                        | 252     |   | $ | 1,781 |   | $ | 2,278 |   | $ | 1,983 |   | $ | 737 |   |

|   | (1)  | EBITDA = Earnings before interest, taxes, depreciation                and amortization, and stock-based compensation expense |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------|

----

|   | (2)  | Working capital (deficit) = current assets                    minus current                    liabilities |
|--------|-----------|------------------------------------------------------------------------------------------------------------|
|   | (3)  | Net margin = Gross profit plus cost of sales                    depreciation |
|--------|-----------|------------------------------------------------------------------------------|
|   | (4)  | Net margin per gallon = Net margin divided                    by total                    gallons sold |
|--------|-----------|--------------------------------------------------------------------------------------------------------|
|   | (5)  | Operating income, net income and EBITDA for                    the year                    ended June 30, 2004, includes a $757,000 gain on                    extinguishment of debt |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (6) | The                      year ended June 30, 2006 included $472,000, in interest expense                      to                      write-off debt discounts and deferred debt costs and a prepayment                      penalty                      related to the warrants issued on June 30, 2006, to convert a portion                      of the August 2003, January 2005, and September 2005 Notes. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |   |   |
|--|--------|--------|

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**Item      7.  Management’s Discussion and Analysis of Financial Condition and      Results of Operations **

**FORWARD      LOOKING STATEMENTS **

|  | · | Our                beliefs regarding our position in the commercial mobile fueling and                bulk                fueling; lubricant and chemical packaging, distribution and sales;                integrated out-sourced fuel management services; and transportation                logistics markets; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Our strategies, plan, objectives                and                expectations concerning our future operations, cash flows, margins,                revenues, profitability, liquidity and capital                resources; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Our efforts to improve operational,                    financial                    and management controls and reporting systems and procedures;                    and |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Our plans to expand and diversify                        our business                        through acquisitions of existing companies or their operations                        and                        customer bases. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the avoidance of future net                    losses; |
|--|--------|--------------------------------------------------------|

|  | · | the avoidance of adverse                          consequences relating                          to our outstanding debt; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------|

|  | · | our continuing ability                                to pay interest and                                principal on our debt instruments, and to pay our                                accounts payable and                                other liabilities when due; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | our continuing                                      ability to comply with                                      financial covenants contained in our credit                                      agreements; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | our continuing                                            ability to obtain all necessary                                            waivers of covenant violations, if any,                                            in our debt                                            agreements; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the avoidance of significant                      provisions for                      bad debt reserves on our accounts                      receivable; |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the continuing demand for                        our products and                        services at competitive prices and acceptable                        margins; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the avoidance of negative                          customer reactions                          to new or existing marketing                          strategies; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | · | the avoidance of significant                            inventory                            reserves for slow moving                            products; |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | our continuing ability                              to acquire sufficient                              trade credit from fuel and lubricants suppliers and                              other                              vendors; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the successful integration                                of acquired                                companies into our existing operations, and enhancing                                the profitability of                                the integrated businesses; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the successful                                        execution of our acquisition                                        and diversification strategy, including the                                        availability of sufficient                                        capital to acquire additional businesses                                        and to support the infrastructure                                        requirements of a larger combined                                        company; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the                                                  success in responding to competition                                                  from                                                  other providers of similar services; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · |  the                                                            impact of generally positive                                                            economic and market conditions;                                                            and |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | the                                                                      ability to                                                                      retire or convert                                                                      debt to                                                                      equity. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**OVERVIEW**

**Our      Business**

----

***Executive      Summary***

|   | · | In                fiscal 2007, we had a net loss of $6.6 million. These results include                $4.6                million in non-cash charges, such as depreciation and amortization                of                fixed assets, debt costs, debt discounts, stock base compensation                and non                cash provision for allowance of doubtful accounts, $2.6 million in                stated                interest expense associated with servicing our debt, non-legal public                company costs of $1.2 million, and legal expenses of $895,000. We                have                made significant investments in building a corporate infrastructure                which                includes the Enterprise Resource Planning (“ERP”) system implementation,                the addition of key personnel, and expansion of office space, among                other                enhancements, which we believe will enable us to execute on our growth                strategy. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                the fourth quarter, we continued to reduce our outstanding promissory                notes by an additional $939,000, adding up to an aggregate of $1.6                million                during the year, through their conversion into common stock as a                result of                the exercise of common stock purchase warrants with the conversion                of                promissory notes by certain investors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                the fourth quarter, we sold 29 pieces of equipment for an aggregate                amount                of $1.1 million, realizing a net gain of approximately $321,000.                The                proceeds of the sale will be used to upgrade our fleet through the                purchase of newer and under warranty equipment, thus reducing future                repair and maintenance costs. Because this equipment will be replacement                collateral under our senior subordinated promissory notes, the proceeds                from the sale of the old equipment are classified in our consolidated                balance sheet as restricted cash. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                the fourth quarter, we completed the implementation of our information                systems. The ERP operating and accounting systems replaced three                legacy                systems. The effective utilization of the new systems will enable                us to                realize economies of scale and eliminate duplicative costs while                creating                an improved capability to integrate future acquisitions on an accelerated                basis. We believe that the distractions associated with this                implementation impacted our ability to manage the acquisitions, and                the                legacy business was severely hampered by an incomplete and disjointed                set                of information tools, impairing our profitability. We also believe                that                the disruptions to our business created by the implementation of                the new                system are now behind us. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                the third quarter, we raised additional capital through a $3.3 million                private placement of 2.1 million shares of our common stock and warrants                to purchase an additional 423,800 shares. The proceeds from the placement                were used to satisfy $732,300 in payment obligations related to our                August                2003 promissory notes. The remaining funds were used for general                working                capital purposes. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | During                fiscal 2007, we entered into amendments to our line of credit increasing                it from $20.0 million to $25.0 million, extending the maturity date                from                September 25, 2007 to June 30, 2008 and modifying certain financial                covenants. We believe that the increase, extension and modifications                will                enable us to continue to meet the working capital needs of the base                business. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During                fiscal 2007, we significantly strengthened our management team, including                the appointments of a Senior Vice President of Information Services&                Administration and Chief Information Officer, Senior Vice President                of                Marketing & Sales and Investment Relations Officer and a Vice                President of Finance and Accounting, among others. We believe that                these                management additions provide us with professional resources necessary                to                effectively execute our business plan and growth                strategy. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | External                factors beyond our control have continued to impact our results of                operations. While fuel price fluctuations affect our revenues, our                gross                profits are generally not affected by such fluctuations since we                are able                to pass the increased cost of the product on to our customers. However,                higher fuel prices coupled with negative economic conditions in certain                markets have decreased the demand for the services and goods provided                by                the transportation, manufacturing, services and other industries                that                comprise the majority of our customer base. While we have continued                to increase the organic growth in our mobile fueling services through                the                addition of new customers seeking to reduce fuel costs, the decrease                in                our existing customers’ business and their efforts to reduce fuel                consumption on the face of higher prices has resulted in lower volumes                of                fuel being supplied by us to these customers. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Subsequent                to our fiscal year 2007, on August 8, 2007, we sold $11.8 million                in debt                and equity securities (the “Offering”). We satisfied the principal balance                of our then outstanding August 2003, January 2005 and September 2005                promissory notes with the proceeds of the August 2007 placement.                As a                result of this transaction we lowered our senior secured subordinated                debt                from $11.2 million to $10.6 million at August 8, 2007. Since the                new notes                mature in December 31, 2009, the debt associated with the promissory                notes                was classified in our consolidated balance sheet as long-term debt. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                net loss from operations for fiscal year 2007 was $6.6 million compared                to                $4.9 million for fiscal year 2006. The primary reason for the $1.7                million                increase in the net loss was the $2.6 million increase in selling,                general                and administrative expenses due to the incremental corporate                infrastructure costs of $2.2 million incurred to support our acquisition                and diversification strategies. Additionally, we experienced an increase                of $610,000 in legal fees, from $285,000 to $895,000 that were related                to                our reincorporation in Delaware, legal public company costs, litigation                and general legal matters. We also incurred $273,000 in additional                non-legal public company costs in fiscal 2007, increasing from $910,000                to                $1.2 million. Other selling, general and administrative expenses                increases                include additional depreciation of $393,000 primarily related to                the new                ERP system and expanded corporate office and operations space. These                increases were partially offset by a decrease of $760,000 as a result                of                the integration of the companies acquired. The increase in selling,                general and administrative expenses was also partially offset by                a                $222,000 increase in gross profit resulting from our emphasis on                developing new business with higher overall net margin per gallon                contribution, a decrease in interest expense of $298,000 primarily                due as                a result of lower outstanding debt, and recognition in fiscal year                2007 of                a $321,000 gain from the sale of assets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For                fiscal year 2007, net margin per gallon was 16.9 cents per gallon                compared                to 14.9 cents per gallon for the same period in the prior year. The                increase in net margin per gallon was the result of our elimination                or                reduction of prior low margin business, including the termination                of                operations in our Baltimore location. With the completion of the                implementation of our ERP systems, we anticipate that, in the future,                management will be in a better position to evaluate and identify                lower                margin operations and services and respond                accordingly. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Earnings                before interest, taxes, depreciation and amortization and stock-based                compensation expense (“EBITDA”), a non-GAAP measure, for fiscal year 2007                were $252,000 compared to $1.8 million for fiscal year 2006. The                primary                reason for the $1.5 million decrease was the increase in selling,                general                and administrative expenses discussed above, partially offset by                the                increase in gross profit, the decrease in interest expense and the                gain                from the sale of assets, described                above. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Financial                results from our commercial mobile and bulk fueling services business                continue to be largely dependent on the number of gallons of fuel                sold and                the net margin per gallon achieved. The 9.4 million gallon reduction                in                the current year as compared to the prior year was primarily due                to the                termination of operations in our Baltimore location in March 2006                and the                curtailment in August 2006 of a portion of the low margin fuel transport                services business in our Mid-Continent division. In addition, we                believe                our volume decrease is also a result of a decrease in industry demand                stemming from the contraction of the national economy, impacting                the                industries we serve, and our customers’ efforts to reduce fuel consumption                in light of dramatically increased fuel prices. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · |  Identify,                finance, acquire and integrate diversified                businesses: |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | Continue                to identify acquisition targets based on factors such as market presence,                growth potential of product and service lines, margin contribution,                competition impact, customer loyalty, established management, integration                efficiencies and controls; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Pursue                financing arrangements that would enable us to execute on our acquisition                strategy; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | Integrate                those companies that we acquire timely and effectively realizing                efficiencies and economies of scale expediently. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Expand                and improve our existing business emphasizing higher margin                sales: |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | Expand                business that provides recurring revenue;                and |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | Reduce                direct operating expenses and selling, general and administrative                expenses; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Seek                financing arrangements with our vendors that will provide us with                better                extended payment terms and new credit                lines; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Improve                on our collection efforts thereby accelerating and improving our                cash                flows; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Optimize                our capital expenditures investing our restricted cash in newer equipment                thereby reducing repair and maintenance costs. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**RESULTS      OF OPERATIONS: **

**Comparison      of Year Ended June 30, 2007 (“fiscal 2007”) to Year Ended June 30, 2006 (“fiscal      2006”)**

**Revenues**

**Gross      Profit**

----

***Selling,      General and Administrative Expenses***

| Corporate                infrastructure costs such as, personnel resources, development and                implementation of a new fully integrated accounting, operations,                internal                control and management information system, and integration                costs |   | $      | 2,169  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Legal                  fees related to the Company's reincorporation, public company costs,                  and other general matters                                                                                                                                                             |   |   | 610    |   |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Non-legal                  public company compliance expenses, including auditing fees,                  proxy statements, and name incorporation changes                                                                                                                                     |   |   | 273    |   |
|                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Increase                  in SG&A depreciation related to ERP system                  implementation                                                                                                                                                                                           |   |   | 199    |   |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Increase                in general SG&A depreciation                                                                                                                                                                                                                                           |   |   | 194    |   |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Provision                for doubtful accounts and collection fees                                                                                                                                                                                                                                 |   |   | 101    |   |
|                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Increase                  in amortization related to intangibles associated with the                  acquisitions                                                                                                                                                                                 |   |   | 74     |   |
|                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Reduction                  in acquired SG&A costs associated with H & W and Shank                  Services                                                                                                                                                                           |   |   | (760   | )      |
|                                                                                                                                                                                                                                                                                                    |   |   |   |   |
| Reduction                  in facilities expenses related to the integration of                  Dallas and Houston locations                                                                                                                                                                      |   |   | (271   | )      |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Other,                net                                                                                                                                                                                                                                                                          |   |   | (15    | )      |
|                                                                                                                                                                                                                                                                                               |   |   |   |   |
| Total                increase                                                                                                                                                                                                                                                                      |   | $      | 2,574  |   |

----

***Interest      Expense***

|                                                  |   | **Year                Ended** |   |
|-------------------------------------------------------|--------|-------------------------------|--------|
|                                                  |   | **June                30,**   |   |
|                                                  |   | **2007**                      |   | **2006** |   |
| Stated                Rate Interest Expense:          |   |                          |   |   |   |
| Line                of credit                         |   | $                             | 1,212  |   | $ | 870 |   |
| Long                term debt                         |   |                          | 1,363  |   |   | 1,471 |   |
| Other                                                 |   |                          | 64     |   |   | 75 |   |
| Total                stated rate interest expense     |   |                          | 2,639  |   |   | 2,416 |   |
|                                                  |   |                          |   |   |   |   |   |
| Non-Cash                Interest Amortization:        |   |                          |   |   |   |   |   |
| Amortization                of deferred debt costs    |   |                          | 342    |   |   | 521 |   |
| Amortization                of debt discount          |   |                          | 746    |   |   | 1,074 |   |
| Other                                                 |   |                          | -      |   |   | 14 |   |
| Total                amortization of interest expense |   |                          | 1,088  |   |   | 1,609 |   |
|                                                  |   |                          |   |   |   |   |   |
| Total                interest expense                 |   | $                             | 3,727  |   | $ | 4,025 |   |

***Income      Taxes***

----

***Net      Loss***

**EBITDA      - Non-GAAP Measure**

|                                                        |   | **Year                ended** |   |
|-------------------------------------------------------------|--------|-------------------------------|--------|
|                                                        |   | **June                30,**   |   |
|                                                        |   | **2007**                      |   | **2006** |   |
| Net                loss                                     |   | $                             | (6,589 | ) | $ | (4,878 | ) |
| Add                back:                                    |   |                          |   |   |   |   |   |
| Interest                expense                             |   |                          | 3,727  |   |   | 4,025 |   |
| Stock-based                compensation expense             |   |                          | 491    |   |   | 511 |   |
| Depreciation                and amortization expense:       |   |                          |   |   |   |   |   |
| Cost                of sales                                |   |                          | 1,702  |   |   | 1,667 |   |
| Selling,                general and administrative expenses |   |                          | 921    |   |   | 456 |   |
| EBITDA                                                      |   | $                             | 252    |   | $ | 1,781 |   |

----

|                                                                              |   | **Year                    Ended June 30,** |
|-----------------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                                              |   | **2007**                                   |   | **2006** |   |
| Net                    loss                                                       |   | $                                          | (6,589 | ) | $ | (4,878 | ) |
|                                                                              |   |                                       |   |   |   |   |   |
| Add:                    non-cash items:                                           |   |                                       |   |   |   |   |   |
| Depreciation                    - cost of sales                                   |   |                                       | 1,702 |   |   | 1,667 |   |
| Depreciation                    and amortization - SG&A                       |   |                                       | 921 |   |   | 456 |   |
| Amortization                    of deferred debt cost                             |   |                                       | 342 |   |   | 521 |   |
| Amortization                    of debt discount                                  |   |                                       | 746 |   |   | 1,009 |   |
| Stock-based                    compensation expense                               |   |                                       | 491 |   |   | 511 |   |
| Other                    non-cash expenses                                        |   |                                       | (23 | ) |   | 79 |   |
| Inventory                    reserve                                              |   |                                       | (38 | ) |   | 172 |   |
| Provision                    for allowance of doubtful accounts                   |   |                                       | 477 |   |   | 404 |   |
| Total                    non-cash items                                           |   |                                       | 4,618 |   |   | 4,819 |   |
|                                                                              |   |                                       |   |   |   |   |   |
| Net                    loss before non-cash items                                 |   |                                       | (1,971 | ) |   | (59 | ) |
|                                                                              |   |                                       |   |   |   |   |   |
| Add:                    Corporate infrastructure and integration costs            |   |                                       | 2,169 |   |   | 2,298 |   |
|                                                                              |   |                                       |   |   |   |   |   |
| Net                    income before non-cash items and corporate                 |   |                                       |   |   |   |   |   |
| infrastructure                    and integration costs                           |   |                                       | 198 |   |   | 2,239 |   |
|                                                                              |   |                                       |   |   |   |   |   |
| Add:                    Stated rate interest expense (See interest expense table) |   |                                       | 2,639 |   |   | 2,416 |   |
| Deduct:                    Net gain on sale of assets                             |   |                                       | (321 | ) |   | - |   |
|                                                                              |   |                                       |   |   |   |   |   |
| Proforma                    EBITDA                                                |   | $                                          | 2,516 |   | $ | 4,655 |   |

**Comparison      of Year Ended June 30, 2006 (“fiscal 2006”) to Year Ended June 30, 2005 (“fiscal      2005”)**

**Revenues**

----

***Gross      Profit***

***Selling,      General and Administrative Expenses***

***Interest      Expense***

|                                                      |   | **Year                Ended****June                30,** |      |
|-----------------------------------------------------------|--------|----------------------------------------------------------|-----------|
|                                                      |   | **2006**                                                 |      | **2005** |   |
| **Stated                Rate Interest Expense**:          |   |                                                     |      |   |   |
| Line                of credit                             |   | $                                                        | 870       |   | $ | 239 |   |
| Long                term debt                             |   |                                                     | 1,471     |   |   | 959 |   |
| Other                                                     |   |                                                     | 75        |   |   | 18 |   |
| **Total                stated rate interest expense**     |   |                                                     | **2,416** |   |   | **1,216** |   |
|                                                      |   |                                                     |      |   |   |   |   |
| **Non-Cash                Interest Amortization:**        |   |                                                     |      |   |   |   |   |
| Amortization                of deferred debt costs        |   |                                                     | 521       |   |   | 270 |   |
| Amortization                of debt discount              |   |                                                     | 1,074     |   |   | 425 |   |
| Other                                                     |   |                                                     | 14        |   |   | — |   |
| **Total                amortization of interest expense** |   |                                                     | **1,609** |   |   | **695** |   |
|                                                      |   |                                                     |      |   |   |   |   |
| **Total                interest expense**                 |   | **$**                                                    | **4,025** | ** ** | **$** | **1,911** |   |

**Income        Taxes**

----

***Net      Loss***

***EBITDA      - Non-GAAP Measure***

|                                                                                                                                                                                                                                                                                                                                                               |   | **Year                ended****June                30,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                               |   | **2006**                                                 |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                                                     |   |   |   |
| Net                loss                                                                                                                                                                                                                                                                                                                                            |   | $                                                        | (4,878 | ) | $ | (1,460 | ) |
| Add                back: Interest                expense, net of interest income                                                                                                                                                                                                                                                                                   |   |                                                     | 2,416  |   |   | 1,208 |   |
| Non-cash                interest expense                                                                                                                                                                                                                                                                                                                           |   |                                                     | 1,609  |   |   | 695 |   |
| Stock-based                compensation expense                                                                                                                                                                                                                                                                                                                    |   |                                                     | 511    |   |   | — |   |
| Depreciation                and amortization expense (*):                                                                                                                                                                                                                                                                                                          |   |                                                     |   |   |   |   |   |
| Cost                of sales                                                                                                                                                                                                                                                                                                                                       |   |                                                     | 1,667  |   |   | 1,467 |   |
| Selling,                general and administrative expenses                                                                                                                                                                                                                                                                                                        |   |                                                     | 456    |   |   | 368 |   |
| EBITDA                                                                                                                                                                                                                                                                                                                                                             |   | $                                                        | 1,781  |   | $ | 2,278 |   |
|                                                                                                                                                                                                                                                                                                                                                               |
| (*)                The Year ended June 30, 2005, includes $461 of depreciation expense                of                excess equipment abandoned after fleet rerouting following the Shank                Services acquisition and accelerated depreciation expense of computer                software for changes in infrastructure                technology. |

**Capital      Resources and Liquidity **

----

***Sources      of Cash***

*Debt      Financing and Equity Offerings*

----

| Date                          |   | Common |      |      |   | Principal                   |   | Prepayment |      |
|-------------------------------|--------|--------|-----------|-----------|--------|-----------------------------|--------|------------|-----------|
| Of                            |   | Shares |      | Note      |   | Amount                      |   | Penalty    |      |
| Exercise                      |   | Issued |      | Converted |   | Converted                   |   | Reduction  |      |
|                          |   |   |      |      |   |                        |   |       |      |
| March                29, 2007 |   |   | 424,835   |      |   | January                2005 |   | $          | 630,000   |   | $ | 16,000 |   |
|                          |   |   |      |      |   |                        |   |       |      |   |   |   |   |
| April                3, 2007  |   |   | 203,651   |      |   | August                2003  |   |       | 302,000   |   |   | 8,000 |   |
|                          |   |   |      |      |   |                        |   |       |      |   |   |   |   |
| May                18, 2007   |   |   | 362,391   |      |   | August                2003  |   |       | 538,000   |   |   | 13,000 |   |
|                          |   |   |      |      |   |                        |   |       |      |   |   |   |   |
| June                18, 2007  |   |   | 66,406    |      |   | August                2003  |   |       | 99,000    |   |   | 2,000 |   |
|                          |   |   |      |      |   |                        |   |       |      |   |   |   |   |
|                          |   |   | 1,057,283 |      |   |                        |   | $          | 1,569,000 |   | $ | 39,000 |   |

** **

*Warrants*

**      t**

----

***Acquisitions***

*Shank      Services*

*H      & W *

***Cash      Flows***

|                                                                             |   | **Year                Ended June 30,** |   |
|----------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                             |   | **2007**                               |   | **2006** |   |
| Net                proceeds from issuances of common stock                       |   |                              |   |    |   |
| and                warrants                                                      | $      | 2,910                                  |   | $ | - |   |
| Net                cash borrowings                                               |   | 1,685                                  |   |   | 3,273 |   |
| Proceeds                from disposal of equipment                               |   | 1,141                                  |   |   | 7 |   |
| Proceeds                from exercise of common stock options and warrants  |   | 31                                     |   |   | 2,484 |   |
| Proceeds                from issuance of promissory notes                        |   | -                                      |   |   | 3,000 |   |
|                                                                             | $      | 5,767                                  |   | $ | 8,764 |   |

----

|                                                       |   |   | **Year                Ended June 30,** |   |
|------------------------------------------------------------|--------|--------|----------------------------------------|--------|
|                                                       |   |   | **2007**                               |   |   | **2006** |   |
| Cash                used in operations                     |   | $      | 4,363                                  |   | $ | 2,744 |   |
| Principal                payments on promissory notes      |   |   | 1,794                                  |   |   | 1,385 |   |
| Purchase                of property and equipment          |   |   | 1,344                                  |   |   | 2,392 |   |
| Increase                in restricted cash                 |   |   | 1,145                                  |   |   | - |   |
| Payments                of debt and warrant issuance costs |   |   | 114                                    |   |   | 299 |   |
| Capital                lease payments                      |   |   | 123                                    |   |   | 134 |   |
| Acquisition                of business                     |   |   | -                                      |   |   | 1,798 |   |
| Repayments                of note payable                  |   |   | -                                      |   |   | 17 |   |
|                                                       |   | $      | 8,883                                  |   | $ | 8,769 |   |
|                                                       |   |   |                                   |   |   |   |   |
| Net                change in cash and cash equivalents     |   | $      | (3,116                                 | )      | $ | (5 | ) |

*Adequacy      of Capital Resources*

*.      *

----

***Contractual      Obligations***

|                                       |   |   | **PAYMENTS                DUE BY PERIOD (in 000’s)** |   |
|--------------------------------------------|--------|--------|------------------------------------------------------------|--------|
|                                       |   |   |                                                       |   |   | **Less                than** |   |   |   |   |   |   |   |   | **More                than** |   |
| **Contractual                Obligations** |   |   | **Total**                                                  |   |   | **1                Year** |   |   | **2-3                Years** |   |   | **4-5                Years** |   |   | **5                Years** |   |
| Long-term                debt              |   | $      | 11,277                                                     |   | $ | - |   | $ | 11,277 |   | $ | - |   | $ | - |   |
| Operating                leases for real   |   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| estate                and equipment        |   |   | 4,264                                                      |   |   | 1,106 |   |   | 1,712 |   |   | 965 |   |   | 481 |   |
| Capital                lease obligations   |   |   | 26                                                         |   |   | 26 |   |   | - |   |   | - |   |   | - |   |
| Line                of credit              |   |   | 17,297                                                     |   |   | 17,297 |   |   | - |   |   | - |   |   | - |   |
|                                       |   |   |                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  **Total**                            |   | $      | 32,864                                                     |   | $ | 18,429 |   | $ | 12,989 |   | $ | 965 |   | $ | 481 |   |

|   | · | Interest                payments associated with long-term debt obligations are not included                in                the table above. In addition, in August 2007, the outstanding notes                were                satisfied with the proceeds from a new senior secured convertible                subordinated debt. No principal is due on the new debt until it matures                on                December 31, 2009. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We                have a $25.0 million line of credit security agreement, with an                outstanding balance of $17.3 million, which expires June 30, 2008,                and                therefore, it is shown as due in less than one                year. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Off-Balance      Sheet Arrangements***

**NEW      ACCOUNTING STANDARDS AND CRITICAL ACCOUNTING POLICIES AND      ESTIMATES**

***Recent      Accounting Pronouncements***

----

***Critical      Accounting Policies and Estimates***

**Accounts      Receivable and Allowance for Doubtful Accounts**

----

**Inventory      Valuation Reserves **

**Property      and Equipment**

**Goodwill      and Other Intangible Assets**

----

**Income      Taxes**

**Item      7A.  Quantitative and Qualitative Disclosures About Market      Risk**

**Item      8.  Financial Statements and Supplementary Data**

**Item      9.  Changes in and Disagreements with Accountants on Accounting and      Financial Disclosure **

----

**Item      9A. Controls and Procedures **

*Evaluation      of disclosure controls and procedures. *

*Changes      in Internal Control Over Financial Reporting*

| ·   | We                significantly strengthened our management team, including the appointments                of a Senior Vice President of Information Services & Administration                and Chief Information Officer, Senior Vice President of Marketing&                Sales and Investment Relations Officer and a Vice President of Finance                and                Accounting, among others. We also recruited additional management                and                staff in information technology, accounting and                administration. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                have invested over $2.4 million during calendar years 2007 and 2006                in the                development and implementation of a new fully integrated accounting                and                operations internal control and management information                system. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                expanded our corporate infrastructure in order to upgrade and improve                all                internal accounting procedures and processes supporting our existing                business and anticipated                acquisitions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We                implemented a program to develop and improve policies and procedures                in                connection with the operational performance of our internal finance                and                accounting processes and underlying information and reporting systems;                establish greater organizational accountability and lines of                responsibility and approval; and to better support our processes                operations. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                improved our organizational structure to help achieve the proper                number                of, and quality of our accounting, finance and information technology                functions, including the proper segregation of duties among accounting                personnel. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                refined our period-end financial reporting processes to improve the                quality and timeliness of our financial                information. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Inherent      Limitations on Effectiveness of Controls*

**Item      9B. Other Information**

----

**PART      III**

**Item      10.  Directors, Executive Officers, and Corporate Governance**

**Item      11.  Executive Compensation**

**Item      12.  Security Ownership of Certain Beneficial Owners and Management      and Related Stockholder Matters**

**Item      13.  Certain Relationships, Related Transactions, and Director      Independence**

**Item      14.  Principal Accounting Fees and Services**

----

**PART      IV**

**Item      15.  Exhibits and Financial Statement Schedules**

**(a)      Exhibits**

| **Exhibits** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.1          | Asset                Purchase Agreement by and among SMF Energy Corporation., SMF Services,                Inc., Shank C&E Investments, L.L.C., Jerry C. Shanklin and Claudette                Shanklin dated January 25, 2005 filed as Exhibit 2.1 to the Company’s Form                8-K filed January 31, 2005 and incorporated by reference                herein.                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.2          | Supplemental                Agreement dated February 18, 2005 to the Asset Purchase Agreement                by and                among SMF Energy Corporation., SMF Services, Inc., Shank C&E                Investments, L.L.C., Jerry C. Shanklin and Claudette Shanklin dated                January 25, 2005 filed as Exhibit 2.1 to the Company’s Form 8-K filed                February 25, 2005 and incorporated by reference herein.                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.3          | Stock                Purchase Agreement by and among SMF Energy Corporation, H & W                Petroleum Co., Inc., Eugene Wayne Wetzel, Mary Kay Wetzel, Sharon                Harkrider, William M. Harkrider II, W. M. Harkrider Testamentary                Trust,                Harkrider Distributing Company, Inc. and W & H Interests dated                September 7, 2005 filed as Exhibit 2.1 to the Company’s Form 8-K filed                September 8, 2005 and incorporated by reference herein. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 2.4          | Agreement                of Merger and Plan of Merger and Reorganization between Streicher                Mobile                Fueling, Inc. and SMF Energy Corporation dated February 13, 2007.                Filed as                Exhibit 2.1 to the Company’s Form 8-K filed February 14, 2007 and                incorporated by reference herein.                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.1          | Restated                Articles of Incorporation filed as Exhibit 3.1 to the Company’s Form 10-K                for the fiscal year ended June 30, 2003 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                                                |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.2          | Amended                and Restated Bylaws filed as Exhibit 3.2 to the Company’s Form 10-Q for                the quarter ended December 31, 2003 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.3          | Certificate                of Incorporation of SMF Energy Corporation and Certificate of Amendment                of                Certificate of Incorporation of SMF Energy Corporation (incorporated                by                reference to Appendix B to the Company’s Definitive Proxy Statement on                Schedule 14A, filed on October 30, 2006).                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 3.4          | Bylaws                of SMF Energy Corporation (incorporated by reference to Appendix                D to the                Company’s Definitive Proxy Statement on Schedule 14A, filed on October 30,                2006).                                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.1          | Form                of Common Stock Certificate filed as Exhibit 4.1 to the Company’s                Registration Statement on Form SB-2 (No. 333-11541) and incorporated                by                reference herein.                                                                                                                                                                                                                                                                                                 |

----

|      |                                                                                                                                                                                                                                                                                            |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.2       | Form                of Redeemable Common Stock Purchase Warrant filed as Exhibit 4.2                to the                Company’s Registration Statement on Form SB-2 (No. 333-11541) and                incorporated by reference herein.                                              |
|      |                                                                                                                                                                                                                                                                                            |
| 4.3       | Underwriters’                Purchase Option Agreement between the Company and Argent Securities,                Inc.                filed as Exhibit 4.3 to the Company’s Registration Statement on Form SB-2                (No. 333-11541) and incorporated by reference herein. |
|  4.4 |  Warrant                Agreement between the Company and American Stock Transfer & Trust                Company filed as Exhibit 4.4 to the Company’s Registration Statement on                Form SB-2 (No. 333-11541) and incorporated by reference herein.                  |
|      |                                                                                                                                                                                                                                                                                            |
| 4.5       | Indenture                with The Bank of Cherry Creek dated August 29, 2003 filed as Exhibit                10.14                to the Company’s Form 10-K for the fiscal year ended June 30, 2003 and                incorporated by reference herein.                                 |
|      |                                                                                                                                                                                                                                                                                            |
| 4.6       | Form                of 10% Promissory Note dated January 25, 2005 filed as Exhibit 10.2                to the                Company’s Form 8-K filed January 31, 2005 and incorporated by reference                herein.                                                               |
|      |                                                                                                                                                                                                                                                                                            |
| 4.7       | Form                of Investor Warrant dated January 25, 2005 filed as Exhibit 10.3                to the                Company’s Form 8-K filed January 31, 2005 and incorporated by reference                herein.                                                                  |
|      |                                                                                                                                                                                                                                                                                            |
| 4.8       | Indenture                Agreement with American National Bank dated January 25, 2005 filed                as                Exhibit 10.4 to the Company’s Form 8-K filed January 31, 2005 and                incorporated by reference herein.                                           |
|      |                                                                                                                                                                                                                                                                                            |
| 4.9       | Form                of Placement Agent Warrants dated January 25, 2005 filed as Exhibit                10.5                to the Company’s Form 8-K filed January 31, 2005 and incorporated by                reference herein.                                                          |
|      |                                                                                                                                                                                                                                                                                            |
| 4.10      | Form                of Note for Stock Purchase Agreement in Exhibit 2.3 herein filed                as                Exhibit 10.1 to the Company’s Form 8-K filed September 8, 2005 and                incorporated by reference herein.                                                 |
|      |                                                                                                                                                                                                                                                                                            |
| 4.11      | Form                of 10% Promissory Note filed as Exhibit 10.3 to the Company’s Form 8-K                filed September 8, 2005 and incorporated by reference                herein.                                                                                                    |
|      |                                                                                                                                                                                                                                                                                            |
| 4.12      | Form                of Investor Warrant filed as Exhibit 10.4 to the Company’s Form 8-K filed                September 8, 2005 and incorporated by reference herein.                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                            |
| 4.13      | Form                of Indenture Agreement filed as Exhibit 10.5 to the Company’s Form 8-K                filed September 8, 2005 and incorporated by reference                herein.                                                                                                    |
|      |                                                                                                                                                                                                                                                                                            |
| 4.14      | Form                of Warrant. Filed as Exhibit 10.1 to the Company’s Form 8-K filed February                22, 2007 and incorporated by reference herein.                                                                                                                              |
|      |                                                                                                                                                                                                                                                                                            |
| 4.15      | Form                of 11% Senior Secured Convertible Promissory Note dated August 8,                2007.                Filed as Exhibit 10.2 to the Company’s Form 8-K filed August 14, 2007 and                incorporated by reference herein.                                      |
|      |                                                                                                                                                                                                                                                                                            |
| 4.16      | Form                of Indenture dated August 8, 2007. Filed as Exhibit 10.3 to the Company’s                Form 8-K filed August 14, 2007 and incorporated by reference                herein.                                                                                          |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.17   | Form                of Warrant dated August 8, 2007. Filed as Exhibit 10.5 to the Company’s                Form 8-K filed August 14, 2007 and incorporated by reference                herein.                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *4.18  | Final                form of 11% Senior Secured Convertible Promissory Note dated August                8,                2007.                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.1   | Registrant’s                1996 Stock Option Plan filed as Exhibit 10.2 to the Company’s Registration                Statement on Form SB-2 (No. 333-1154) and incorporated by reference                herein.                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.2   | 2000                Stock Option Plan filed as Exhibit 10.6 to the Company’s Form 10-K for the                fiscal year ended January 31, 2001 and incorporated by reference                herein.                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.5   | 2001                Directors Stock Option Plan filed as Appendix A to the Company’s Proxy                Statement for the Annual Meeting of Shareholders on December 9, 2004                and                incorporated by reference herein.                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.6   | Loan                and Security Agreement with Congress Financial Corporation dated                September                26, 2002 filed as Exhibit 99.1 to the Company’s Form 8-K filed September                30, 2002 and incorporated by reference herein.                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.7   | First                Amendment to Loan and Security Agreement with Congress Financial                Corporation dated March 31, 2003 filed as Exhibit 10.13 to the Company’s                Form 10-K for the fiscal year ended June 30, 2003 and incorporated                by                reference herein.                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.8   | Security                Agreement with The Bank of Cherry Creek dated August 29, 2003 filed                as                Exhibit 10.14 to the Company’s Form 10-K for the fiscal year ended June                30, 2003 and incorporated by reference herein.                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.9   | Second                Amendment to Loan and Security Agreement with Congress Financial                Corporation dated August 29, 2003 filed as Exhibit 10.1 to the Company’s                Form 10-Q for the quarter ended September 30, 2003 and incorporated                by                reference herein.                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.10  | Third                Amendment to Loan and Security Agreement with Congress Financial                Corporation dated August 3, 2003 filed as Exhibit 10.1 to the Company’s                Form 10-Q for the quarter ended December 31, 2004 and incorporated                by                reference herein.                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.11  | Form                of Securities Purchase Agreement dated January 25, 2005 filed as                Exhibit                10.1 to the Company’s Form 8-K filed January 31, 2005 and incorporated by                reference herein.                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.12  | Fourth                Amendment to Loan and Security Agreement by and among SMF Energy                Corporation, SMF Services, Inc. and Wachovia Bank, National Association,                successor by merger to Congress Financial Corporation (Florida) dated                February 18, 2005 filed as Exhibit 10.1 to the Company’s Form 8-K filed                February 25, 2005 and incorporated by reference                herein. |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13  | Subordination                Agreement by, between and among Shank C&E Investments, L.L.C.,                Wachovia Bank, National Association, successor by merger to Congress                Financial Corporation (Florida), SMF Services, Inc. and SMF Energy                Corporation dated February 18, 2005 filed as Exhibit 10.2 to the                Company’s                Form 8-K filed February 25, 2005 and incorporated by reference                herein. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.14  | Amended                and Restated Employment Agreement by and between SMF Energy Corporation                and Richard E. Gathright executed May 14, 2005, effective as of March                1,                2005 filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter                ended March 31, 2005, and incorporated by reference                herein.                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.15  | Form                of Note Purchase Agreement filed as Exhibit 10.2 to the Company’s Form 8-K                filed September 8, 2005 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.16  | Form                of Security Agreement filed as Exhibit 10.6 to the Company’s Form 8-K                filed September 8, 2005 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

| 10.17  | Fifth                Amendment to Loan and Security Agreement by among SMF Energy Corporation,                SMF Services, Inc. and Wachovia Bank, National Association, successor                by                merger to Congress Financial Corporation (Florida) dated October 1,                2005. Filed as Exhibit 10.1 to the Company’s Form 8-K filed October 6,                2005 and incorporated by reference herein.                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.18  | Subordination                Agreement executed effective as of the 1st day of October, 2005,                by,                between and among Eugene Wayne Wetzel, Mary Kay Wetzel, Sharon Harkrider,                William M. Harkrider II, W. M. Harkrider Testamentary Trust, Harkrider                Distributing Company, Inc. and W & H Interests, Wachovia Bank,                National Association, successor by merger to Congress Financial                Corporation (FLORIDA), and SMF Energy Corporation Filed as Exhibit                10.2 to                the Company’s Form 8-K filed October 6, 2005 and incorporated by reference                herein. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.19  | Warrant                Purchase Agreement dated June 30, 2006. Filed as Exhibit 10.1 to                the                Company’s Form 8-K filed July 7, 2006 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.20  | Form                of Stock Purchase Warrant. Filed as Exhibit 10.2 to the Company’s Form 8-K                filed July 7, 2006 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.21  | Sixth                Amendment to Loan and Security Agreement by among SMF Energy Corporation,                SMF Services, Inc., H & W Petroleum Company, Inc. and Wachovia Bank,                National Association, successor by merger to Congress Financial                Corporation (Florida) dated September 22, 2006 and effective March                31,                2006. Filed as Exhibit 10.1 to the Company’s Form 8-K filed October 2,                2006 and incorporated by reference herein.                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.22  | Seventh                Amendment to Loan and Security Agreement by among SMF Energy Corporation,                SMF Services, Inc., H & W Petroleum Company, Inc. and Wachovia Bank,                National Association, successor by merger to Congress Financial                Corporation (Florida) effective September 22, 2006. Filed as Exhibit                10.2                to the Company’s Form 8-K filed October 2, 2006 and incorporated by                reference herein.                                                                                                                                                                                        |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.23  | Amendment                to Warrant Purchase Agreement and Stock Purchase Warrant between                Streicher                Mobile Fueling, Inc. and the Purchasers dated September 28, 2006.                Filed as                Exhibit 10.1 to the Company’s Form 8-K filed October 3, 2006 and                incorporated by reference herein.                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.24  | Second                Amendment to Warrant Purchase Agreement and Stock Purchase Warrant                between                Streicher Mobile Fueling, Inc. and the Purchasers dated November                29, 2006.                Filed as Exhibit 10.1 to the Company’s Form 8-K filed December 4, 2006 and                incorporated by reference herein.                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.25  | Third                Amendment to Warrant Purchase Agreement and Stock Purchase Warrant                between                Streicher Mobile Fueling, Inc. and the Purchasers dated January 14,                2007.                Filed as Exhibit 10.1 to the Company’s Form 8-K filed January 19, 2007 and                incorporated by reference herein.                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.26  | Assumption                Agreement and Eighth Amendment to Loan and Security Agreement by                and among                SMF Energy Corporation, success by merger to Streicher Mobile Fueling,                Inc., SMF Services, Inc., H & W Petroleum Company, Inc. and Wachovia                Bank, National Association, successor by merger to Congress Financial                Corporation (Florida) dated February 14, 2007. Filed as Exhibit 10.1                to                the Company’s Form 8-K filed February 21, 2007 and incorporated by                reference herein. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.27  | Ninth                Amendment to Loan and Security Agreement by and among SMF Energy                Corporation, success by merger to Streicher Mobile Fueling, Inc.,                SMF                Services, Inc., H & W Petroleum Company, Inc. and Wachovia Bank,                National Association, successor by merger to Congress Financial                Corporation (Florida) dated February 15, 2007. Filed as Exhibit 10.2                to                the Company’s Form 8-K filed February 21, 2007 and incorporated by                reference herein.                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.28  | Fourth                Amendment to Warrant Purchase Agreement and Stock Purchase Warrant                between                SMF Energy Corporation, Triage Capital Management, L.P. and Triage                Capital                Management B L.P. dated February 14, 2007. Filed as Exhibit 10.3                to the                Company’s Form 8-K filed February 21, 2007 and incorporated by reference                herein.                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.29  | Form                of Securities Purchase Agreement. Filed as Exhibit 10.2 to the Company’s                Form 8-K filed February 22, 2007 and incorporated by reference                herein.                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.30  | Fifth                Amendment to Warrant Purchase Agreement and Stock Purchase Warrant                between                SMF Energy Corporation, Triage Capital Management, L.P. and Triage                Capital                Management B L.P. dated March 29, 2007. Filed as Exhibit 10.1 to                the                Company’s Form 8-K filed April 3, 2007 and incorporated by reference                herein.                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.31  | Tenth                Amendment to Loan and Security Agreement by and among SMF Energy                Corporation, success by merger to Streicher Mobile Fueling, Inc.,                SMF                Services, Inc., H & W Petroleum Company, Inc. and Wachovia Bank,                National Association, successor by merger to Congress Financial                Corporation (Florida) dated August 8, 2007. Filed as Exhibit 10.1                to the                Company’s Form 8-K filed August 14, 2007 and incorporated by reference                herein.                                |

----

|                        |                                                                                                                                                                                                                            |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  10.32 | Form                of Security Agreement, dated August 8, 2007. Filed as Exhibit 10.4                to the                Company’s Form 8-K filed August 14, 2007 and incorporated by reference                herein. |
|                        |                                                                                                                                                                                                                            |
| *10.33                      | Form                of Note Purchase Agreement dated August 8, 2007.                                                                                                                                                            |
|                        |                                                                                                                                                                                                                            |
| *10.34                      | Form                of Securities Purchase Agreement dated August 8, 2007.                                                                                                                                                      |
|                        |                                                                                                                                                                                                                            |
| *10.35                      | Subordination                Agreement dated July 13, 2007.                                                                                                                                                                     |
|                        |                                                                                                                                                                                                                            |
| *21.1                       | Subsidiaries                of the Company                                                                                                                                                                                      |
|                        |                                                                                                                                                                                                                            |
| *23.1                       | Consent                of Grant Thornton LLP                                                                                                                                                                                    |
|                        |                                                                                                                                                                                                                            |
| *31.1                       | Certificate                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002                                                                                                  |
|                        |                                                                                                                                                                                                                            |
| *31.2                       | Certificate                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002                                                                                                  |
|                        |                                                                                                                                                                                                                            |
| *32.1                       | Certificate                of Chief Executive Officer and Chief Financial Officer pursuant to                Section                906 of The Sarbanes-Oxley Act of 2002                                                       |

**(b)**
**Financial      Statements and Schedule**

----

**SIGNATURES**

|                                     |                                                                                      |                                             |
|------------------------------------------|-------------------------------------------------------------------------------------------|--------------------------------------------------|
|                                     | **SMF                ENERGY CORPORATION**                                                 |
|                                |                                                                                 |                                        |
| Dated:                September 28, 2007 | By:                                                                             | /s/ Richard              E. Gathright  |
|                                     | Richard                E. Gathright, Chief Executive Officer and                President |

| **Name**                                                                                              |   | **Title**                                                                                                                                   |   | **Date**                          |
|-------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By: /s/                Richard E. Gathright Richard                E. Gathright             |   | Chairman                of the Board, Chief Executive Officer and President (Principal Executive                Officer)                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By:                /s/                Michael S. ShoreMichael                S. Shore                 |   | Chief                Financial Officer and Senior Vice President (Principal Financial                and                Accounting Officer) |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By:                /s/                Wendell R. Beard Wendell                R. Beard           |   | Director                                                                                                                                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By: /s/                Steven R. Goldberg  Steven                R. Goldberg      |   | Director                                                                                                                                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By:                /s/                Nat Moore Nat                Moore                         |   | Director                                                                                                                                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By:                /s/                Larry S. Mulkey Larry                S. Mulkey             |   | Director                                                                                                                                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By:                /s/                C. Rodney O’ConnorC.                Rodney O’Connor |   | Director                                                                                                                                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |
| By:                /s/                Robert S. Picow Robert                S. Picow             |   | Director                                                                                                                                    |   | September                28, 2007 |
|                                                                                                  |   |                                                                                                                                        |   |                              |

----

**INDEX      TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                  |   |   | **Page** |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|
| Report                of Independent Registered Public Accounting Firm                                                                |   |   | F-2      |   |
|                                                                                                                                  |   |   |     |   |
| Consolidated                Balance Sheets as of June 30, 2007 and 2006                                                               |   |   | F-3      |   |
|                                                                                                                                  |   |   |     |   |
| Consolidated                Statements of Operations for the Years Ended June 30, 2007, 2006,                and                2005  |   |   | F-4      |   |
|                                                                                                                                  |   |   |     |   |
| Consolidated                Statements of Shareholders’ Equity for the Years Ended June 30, 2007,                2006, and 2005 |   |   | F-5      |   |
|                                                                                                                                  |   |   |     |   |
| Consolidated                Statements of Cash Flows for the Years Ended June 30, 2007, 2006,                and                2005  |   |   | F-6      |   |
|                                                                                                                                  |   |   |     |   |
| Notes                to Consolidated Financial Statements                                                                             |   |   | F-8      |   |

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

----

**SMF      ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING,      INC.)**

**AND      SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

***(      in 000’s, except share and per share data)***

|                                                                                                    |   |   | **June                30, 2007** |   |   | **June                30, 2006** |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------|--------|--------|----------------------------------|--------|
| **ASSETS**                                                                                              |   |   |                             |   |   |                             |   |
| Current                assets:                                                                          |   |   |                             |   |   |                             |   |
| Cash                and cash equivalents                                                                |   | $      | 987                              |   | $      | 4,103                            |   |
| Accounts                receivable, less allowances of $1,401 and $1,252                                |   |   | 25,442                           |   |   | 24,345                           |   |
| Inventories,                less reserve of $238 and $276                                               |   |   | 2,283                            |   |   | 3,321                            |   |
| Prepaid                expenses and other current assets                                                |   |   | 471                              |   |   | 413                              |   |
| Total                current assets                                                                     |   |   | 29,183                           |   |   | 32,182                           |   |
|                                                                                                    |   |   |                             |   |   |                             |   |
| Restricted                cash                                                                          |   |   | 1,145                            |   |   | -                                |   |
| Property                and equipment, net                                                              |   |   | 10,017                           |   |   | 11,739                           |   |
| Identifiable                intangible assets, net                                                      |   |   | 2,771                            |   |   | 3,148                            |   |
| Goodwill                                                                                                |   |   | 228                              |   |   | 228                              |   |
| Deferred                debt costs, net and other assets                                                |   |   | 581                              |   |   | 817                              |   |
| Total                assets                                                                             |   | $      | 43,925                           |   | $      | 48,114                           |   |
|                                                                                                    |   |   |                             |   |   |                             |   |
| **LIABILITIES                AND SHAREHOLDERS’ EQUITY**                                           |   |   |                             |   |   |                             |   |
| Current                liabilities:                                                                     |   |   |                             |   |   |                             |   |
| Line                of credit payable                                                                   |   | $      | 17,297                           |   | $      | 15,612                           |   |
| Accounts                payable                                                                         |   |   | 7,887                            |   |   | 10,367                           |   |
| Accrued                expenses and other liabilities                                                   |   |   | 3,805                            |   |   | 2,787                            |   |
| Current                portion of long-term debt and capital leases                                     |   |   | 26                               |   |   | 2,118                            |   |
| Total                current liabilities                                                                |   |   | 29,015                           |   |   | 30,884                           |   |
| Long-term                liabilities:                                                                   |   |   |                             |   |   |                             |   |
| Promissory                notes, net of unamortized debt discount of $1,027 and                  $1,652 |   |   | 10,250                           |   |   | 10,993                           |   |

| Capital                lease obligation                                                             |   |   | -       |   |   | 25      |   |
|-----------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
| Long-term                debt, net                                                                  |   |   | 10,250  |   |   | 11,018  |   |
| Other                long-term liabilities                                                          |   |   | 546     |   |   | 672     |   |
| Total                liabilities                                                                    |   |   | 39,811  |   |   | 42,574  |   |
|                                                                                                |   |   |    |   |   |    |   |
| Commitments                and contingencies                                                        |   |   |    |   |   |    |   |
| Shareholders’                equity:                                                          |   |   |    |   |   |    |   |
| Common                stock, par value $.01 per share; 50,000,000 shares                authorized; |   |   |    |   |   |    |   |
| 13,702,426                and 10,491,143 issued and outstanding at June 30, 2007                    |   |   |    |   |   |    |   |
| and                2006, respectively                                                               |   |   | 137     |   |   | 105     |   |
| Additional                paid-in capital                                                           |   |   | 25,021  |   |   | 19,890  |   |
| Accumulated                deficit                                                                  |   |   | (21,044 | )      |   | (14,455 | )      |
| Total                shareholders’ equity                                                     |   |   | 4,114   |   |   | 5,540   |   |
| Total                liabilities and shareholders’ equity                                     |   | $      | 43,925  |   | $      | 48,114  |   |

**The      accompanying notes to consolidated financial statements are an integral part      of      these consolidated balance sheets.**

----

**SMF      ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING,      INC.)**

**AND      SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

***(in      000’s, except per share data)***

|                                                        |   |  **Year                Ended June 30,** |     |
|-------------------------------------------------------------|--------|----------------------------------------------|----------|
|                                                        |   |                                         | **2007** |   |   | **2006** |   |   | **2005** |   |
| Petroleum                product sales and service revenues |   | $                                            | 203,375  |   | $ | 219,393 |   | $ | 109,207 |   |
| Petroleum                product taxes                      |   |                                         | 26,394   |   |   | 29,306 |   |   | 24,356 |   |
| Total                revenues                               |   |                                         | 229,769  |   |   | 248,699 |   |   | 133,563 |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Cost                of petroleum product sales and service  |   |                                         | 190,744  |   |   | 206,984 |   |   | 102,619 |   |
| Petroleum                product taxes                      |   |                                         | 26,394   |   |   | 29,306 |   |   | 24,356 |   |
| Total                cost of sales                          |   |                                         | 217,138  |   |   | 236,290 |   |   | 126,975 |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Gross                profit                                 |   |                                         | 12,631   |   |   | 12,409 |   |   | 6,588 |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Selling,                general and administrative expenses |   |                                         | 15,836   |   |   | 13,262 |   |   | 6,145 |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Operating                (loss) income                      |   |                                         | (3,205   | ) |   | (853 | ) |   | 443 |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Interest                expense                             |   |                                         | (3,727   | ) |   | (4,025 | ) |   | (1,911 | ) |
| Gain                on sale of assets and other income      |   |                                         | 343      |   |   | - |   |   | 8 |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Loss                before income taxes                     |   |                                         | (6,589   | ) |   | (4,878 | ) |   | (1,460 | ) |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Income                tax expense                           |   |                                         | -        |   |   | - |   |   | - |   |
| Net                loss                                     |   | $                                            | (6,589   | ) | $ | (4,878 | ) | $ | (1,460 | ) |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Basic                and diluted net loss per share         |   | $                                            | (0.57    | ) | $ | (0.50 | ) | $ | (0.19 | ) |
|                                                        |   |                                         |     |   |   |   |   |   |   |   |
| Basic                and diluted weighted average common    |   |                                         |     |   |   |   |   |   |   |   |
| shares                outstanding                           |   |                                         | 11,509   |   |   | 9,819 |   |   | 7,857 |   |

**The      accompanying notes to consolidated financial statements are an integral part      of      these consolidated statements of operations.**

----

**SMF      ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING,      INC.)**

**AND      SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF SHAREHOLDERS' EQUITY**

***(in      000’s except share data)***

|                                                        |   |                              |       |        |   | **Additional**  |   |             |   |      |   |
|-------------------------------------------------------------|--------|-----------------------------------|------------|-------------|--------|-----------------|--------|-------------|--------|-----------|--------|
|                                                        |   | **Common                  Stock** |       | **Paid-in** |   | **Accumulated** |   |        |   |
|                                                        |   | **Shares**                        |       | **Amount**  |   | **Capital**     |   | **Deficit** |   | **Total** |   |
| **Balance                  at June 30, 2004**               |   |                              | 7,317,960  |        | $      | 73              |   | $           | 13,392 |      | $      | (8,117 | ) | $ | 5,348 |   |
|                                                        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| Net                  loss                                   |   |                              | -          |        |   | -               |   |        | -      |      |   | (1,460 | ) |   | (1,460 | ) |
| Exercise                  of warrants and stock options     |   |                              | 1,635,484  |        |   | 17              |   |        | 1,640  |      |   | - |   |   | 1,657 |   |
| Issuance                  of warrants                       |   |                              | -          |        |   | -               |   |        | 1,293  |      |   | - |   |   | 1,293 |   |
|                                                        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| **Balance                  at June 30, 2005**               |   |                              | 8,953,444  |        |   | 90              |   |        | 16,325 |      |   | (9,577 | ) |   | 6,838 |   |
|                                                        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| Net                  loss                                   |   |                              | -          |        |   | -               |   |        | -      |      |   | (4,878 | ) |   | (4,878 | ) |
| Exercise                  of warrants & stock options   |   |                              | 1,537,699  |        |   | 15              |   |        | 2,469  |      |   | - |   |   | 2,484 |   |
| Issuance                  of warrants                       |   |                              | -          |        |   | -               |   |        | 585    |      |   | - |   |   | 585 |   |
| Stock-based                  compensation expense           |   |                              | -          |        |   | -               |   |        | 511    |      |   | - |   |   | 511 |   |
|                                                        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| **Balance                  at June 30, 2006**               |   |                              | 10,491,143 |        |   | 105             |   |        | 19,890 |      |   | (14,455 | ) |   | 5,540 |   |
|                                                        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| Net                  loss                                   |   |                              | -          |        |   | -               |   |        | -      |      |   | (6,589 | ) |   | (6,589 | ) |
| Exercise                  of warrants                       |   |                              | 35,000     |        |   | -               |   |        | 31     |      |   | - |   |   | 31 |   |
| Issuance                  of common stock through the       |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| exercise                  of warrants related to the        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| conversion                  of promissory notes, net of     |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| unamortized                  debt discount of $206          |   |                              | 1,057,283  |        |   | 11              |   |        | 1,393  |      |   | - |   |   | 1,404 |   |
| Issuance                  of common stock and warrants      |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| from                  private placement, net of             |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| issuance                  costs of $364                     |   |                              | 2,119,000  |        |   | 21              |   |        | 2,889  |      |   | - |   |   | 2,910 |   |
| Adjustment                  for warrant extensions          |   |                              | -          |        |   | -               |   |        | 327    |      |   | - |   |   | 327 |   |
| Amortization                  of stock compensation expense |   |                              | -          |        |   | -               |   |        | 491    |      |   | - |   |   | 491 |   |
|                                                        |   |                              |       |        |   |            |   |        |   |      |   |   |   |   |   |   |
| **Balance                  at June 30, 2007**               |   |                              | 13,702,426 |        | $      | 137             |   | $           | 25,021 |      | $      | (21,044 | ) | $ | 4,114 |   |

**The      accompanying notes to consolidated financial statements are an integral part      of      these consolidated statements of shareholders’ equity.**

----

**SMF      ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING,      INC.)**

**AND      SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

***(in      000’s)***

|                                                                                                           |   | **Year                  Ended June 30,** |     |
|----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                                                           |   | **2007**                                 |     | **                   2006** |   | **                   2005** |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                                                     |   |                                     |     |   |   |   |   |
| Net                  loss                                                                                      |   | $                                        | (6,589   | ) | $ | (4,878 | ) | $ | (1,460 | ) |
| Adjustments                  to reconcile net loss to net cash (used in)                                       |   |                                     |     |   |   |   |   |   |   |   |
| provided                  by operating activities:                                                             |   |                                     |     |   |   |   |   |   |   |   |
| Depreciation                  and amortization:                                                                |   |                                     |     |   |   |   |   |   |   |   |
| Cost                  of sales                                                                                 |   |                                     | 1,702    |   |   | 1,667 |   |   | 1,467 |   |
| Selling,                  general and administrative                                                           |   |                                     | 921      |   |   | 456 |   |   | 368 |   |
| Amortization                  of deferred debt cost                                                            |   |                                     | 342      |   |   | 521 |   |   | 270 |   |
| Amortization                  of debt discount                                                                 |   |                                     | 746      |   |   | 1,009 |   |   | 425 |   |
| Stock-                  based compensation expense                                                             |   |                                     | 491      |   |   | 511 |   |   | - |   |
| Gain                  on sale of assets                                                                        |   |                                     | (321     | ) |   | - |   |   | - |   |
| Inventory                  reserve                                                                             |   |                                     | (38      | ) |   | 172 |   |   | - |   |
| Provision                  for allowance for doubtful accounts                                                 |   |                                     | 477      |   |   | 404 |   |   | (59 | ) |
| Other                                                                                                          |   |                                     | (23      | ) |   | 79 |   |   | - |   |
| Changes                  in operating assets and liabilities, net of effects of                  acquisitions: |   |                                     |     |   |   |   |   |   |   |   |
| Increase                  in accounts receivable                                                               |   |                                     | (1,588   | ) |   | (4,681 | ) |   | (2,454 | ) |
| (Increase)                  decrease in prepaid expenses and other assets                                      |   |                                     | (36      | ) |   | 515 |   |   | (255 | ) |
| (Increase)                  decrease in inventories                                                            |   |                                     | 1,076    |   |   | 567 |   |   | (162 | ) |
| (Decrease)                  increase in accounts payable and other liabilities                                 |   |                                     | (1,523   | ) |   | 914 |   |   | 3,152 |   |
| Net                  cash (used in) provided by operating activities                                           |   |                                     | (4,363   | ) |   | (2,744 | ) |   | 1,292 |   |
|                                                                                                           |   |                                     |     |   |   |   |   |   |   |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES:**                                                     |   |                                     |     |   |   |   |   |   |   |   |
| Cash                  used in business acquisitions, net of cash acquired                                      |   |                                     | -        |   |   | (1,798 | ) |   | (6,436 | ) |
| Purchases                  of property and equipment                                                           |   |                                     | (1,344   | ) |   | (2,392 | ) |   | (811 | ) |
| Proceeds                  from sale of equipment                                                               |   |                                     | 1,141    |   |   | 7 |   |   | 28 |   |
| Increase                  in restricted cash                                                                   |   |                                     | (1,145   | ) |   | - |   |   | - |   |
| Net                  cash used in investing activities                                                         |   |                                     | (1,348   | ) |   | (4,183 | ) |   | (7,219 | ) |
|                                                                                                           |   |                                     |     |   |   |   |   |   |   |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES:**                                                     |   |                                     |     |   |   |   |   |   |   |   |
| Proceeds                  from line of credit                                                                  |   |                                     | 246,210  |   |   | 268,038 |   |   | 151,070 |   |
| Repayments                  of line of credit                                                                  |   |                                     | (244,525 | ) |   | (264,765 | ) |   | (151,188 | ) |
| Proceeds                  from issuance of promissory notes                                                    |   |                                     | -        |   |   | 3,000 |   |   | 6,100 |   |
| Principal                  payment on promissory notes                                                         |   |                                     | (1,794   | ) |   | (1,385 | ) |   | - |   |
| Net                  proceeds from exercise of common stock options and warrants                               |   |                                     | 31       |   |   | 2,484 |   |   | 1,656 |   |
| Proceeds                  from issuance of common stock, net of issuance costs                                 |   |                                     | 2,910    |   |   | - |   |   | - |   |
| Debt                  issuance costs                                                                           |   |                                     | (114     | ) |   | (279 | ) |   | (311 | ) |
| Capital                  lease payments                                                                        |   |                                     | (123     | ) |   | (134 | ) |   | - |   |
| Registration                  costs, issue of warrants                                                         |   |                                     | -        |   |   | (20 | ) |   | - |   |
| Repayment                  of note payable                                                                     |   |                                     | -        |   |   | (17 | ) |   | - |   |
| Net                  cash provided by financing activities                                                     |   |                                     | 2,595    |   |   | 6,922 |   |   | 7,327 |   |
|                                                                                                           |   |                                     |     |   |   |   |   |   |   |   |
| NET                  INCREASE (DECREASE) CASH AND CASH EQUIVALENTS                                             |   |                                     | (3,116   | ) |   | (5 | ) |   | 1,400 |   |
|                                                                                                           |   |                                     |     |   |   |   |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS, beginning of year                                                  |   |                                     | 4,103    |   |   | 4,108 |   |   | 2,708 |   |
|                                                                                                           |   |                                     |     |   |   |   |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS, end of year                                                        |   | $                                        | 987      |   | $ | 4,103 |   | $ | 4,108 |   |

**The      accompanying notes to consolidated financial statements are an integral part      of      these consolidated statements of cash flows.**

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

***(in        000’s)***

| **(Continued)**                                                                                              |   | **Year                  Ended June 30,** |   |
|--------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                                                         |   | **2007**                                 |   | **                   2006** |   | **                   2005** |   |
|                                                                                                         |   |                                     |   |   |   |   |   |
| **SUPPLEMENTAL                  DISCLOSURE OF CASH FLOW INFORMATION:**                                       |   |                                     |   |   |   |   |   |
|                                                                                                         |   |                                     |   |   |   |   |   |
| Cash                  paid for interest                                                                      |   | $                                        | 2,475  |   | $ | 2,264 |   | $ | 876 |   |
|                                                                                                         |   |                                     |   |   |   |   |   |   |   |   |
|                                                                                                         |   |                                     |   |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                  DISCLOSURE OF NON-CASH ACTIVITIES:**                                         |   |                                     |   |   |   |   |   |   |   |   |
|                                                                                                         |   |                                     |   |   |   |   |   |   |   |   |
| Conversion                  of promissory notes, net of unamortized                                          |   |                                     |   |   |   |   |   |   |   |   |
| debt                  discount of $206                                                                       |   | $                                        | 1,404  |   | $ | - |   | $ | - |   |
|                                                                                                         |   |                                     |   |   |   |   |   |   |   |   |
| Unamortized                  debt discount related to warrants consisting of warrant                         |   |                                     |   |   |   |   |   |   |   |   |
| extensions                  in 2007 and warrant issuance in 2006                                             |   | $                                        | 327    |   | $ | 605 |   | $ | - |   |
|                                                                                                         |   |                                     |   |   |   |   |   |   |   |   |
| Debt                  discount costs and deferred debt costs related to issuance of                  January |   |                                     |   |   |   |   |   |   |   |   |
| 2005                  promissory note                                                                        |   | $                                        | -      |   | $ | - |   | $ | 1,293 |   |

**The      accompanying notes to consolidated financial statements are an integral part      of      these consolidated statements of cash flows.**

----

**SMF      ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND      SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**1**
**.**
**NATURE      OF OPERATIONS **

**2**
**.**
**SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis      of Presentation***

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

***Segment      Information***

***Cash      and Cash Equivalents***

***Restricted      Cash***

***Accounts      Receivable***

|                                                                                              |   | **June                  30,** |   |
|---------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                                              |   | **2007**                      |   | **                   2006** |   | **                   2005** |   |
|                                                                                              |   |                          |   |   |   |   |   |
| Balance                  - beginning of period                                                    |   | $                             | 1,252  |   | $ | 1,806 |   | $ | 426 |   |
| Acquisitions                                                                                      |   |                          | -      |   |   | 714 |   |   | 1,877 |   |
| Increase                    (decrease) in provision for                    doubtful accounts |   |                          | 477    |   |   | 404 |   |   | (59 | ) |
| Write-offs,                  net of recoveries                                                    |   |                          | (328   | ) |   | (1,672 | ) |   | (438 | ) |
|                                                                                              |   |                          |        |   |   |  |   |   |  |   |
| Balance                  - end of period                                                          |   | $                             | 1,401  |   | $ | 1,252 |   | $ | 1,806 |   |

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

***Inventories***

***Property      and Equipment***

|                                             |   | **June                  30,** |    | **Estimated                  Useful** |   |
|--------------------------------------------------|--------|-------------------------------|---------|---------------------------------------|--------|
|                                             |   | **2007**                      |    | **2006**                              |   | **Life** |   |
|                                             |   |                          |    |                                  |   |   |   |
| Fuel                  trucks, tanks and vehicles |   | $                             | 16,964  |                                  | $      | 17,877 |   |   | 5                  - 25 years |   |
| Machinery                  and equipment         |   |                          | 1,334   |                                  |   | 1,078 |   |   | 3                  - 5 years |   |
| Furniture                  and fixtures          |   |                          | 587     |                                  |   | 433 |   |   | 5                  - 10 years |   |
| Leasehold                  improvements          |   |                          | 457     |                                  |   | 408 |   |   | Lesser                  of lease term or useful life |   |
| Software                                         |   |                          | 2,415   |                                  |   | 1,675 |   |   | 3                  - 5 years |   |
| Land                                             |   |                          | 67      |                                  |   | 67 |   |   | — |   |
|                                             |   |                          | 21,824  |                                  |   | 21,538 |   |   |   |   |
|                                             |   |                          |    |                                  |   |   |   |   |   |   |
| Less:                  Accumulated depreciation  |   |                          | (11,807 | )                                     |   | (9,799 | ) |   |   |   |
|                                             |   |                          |    |                                  |   |   |   |   |   |   |
| Property                  and equipment, net     |   | $                             | 10,017  |                                  | $      | 11,739 |   |   |   |   |

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

***Income      Taxes***

***Revenue      Recognition***

***Use      of Estimates***

***Fair      Value of Financial Instruments***

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

***Deferred      Debt Cost and Debt Discount***

|                                                              |   | **June                    30,** |   |
|-------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                              |   | **2007**                        |   | **2006** |   |
| Deferred                    Debt Costs                            |   |                            |   |   |   |
|                                                              |   |                            |   |   |   |
| Balance,                    net - beginning of period             |   | $                               | 749    |   | $ | 991 |   |
| Amortization                                                      |   |                            | (342   | ) |   | (366 | ) |
| Write                    off of debt costs related to the         |   |                            |   |   |   |   |   |
| conversion                    of debt                             |   |                            | -      |   |   | (155 | ) |
| Additional                    loan costs incurred during the year |   |                            | 114    |   |   | 279 |   |
|                                                              |   |                            |        |   |   |  |   |
| Balance                    - end of period                        |   | $                               | 521    |   | $ | 749 |   |
|                                                              |   |                            |   |   |   |   |   |
| Debt                    Discount                                  |   |                            |   |   |   |   |   |
|                                                              |   |                            |   |   |   |   |   |
| Balance,                    net - beginning of period             |   | $                               | 1,652  |   | $ | 2,056 |   |
| Amortization                                                      |   |                            | (746   | ) |   | (692 | ) |
| Adjustment                    for warrant extensions              |   |                            | 327    |   |   | - |   |
| Write                    off of debt discount related to the      |   |                            |   |   |   |   |   |
| conversion                    of debt                             |   |                            | (206   | ) |   | (317 | ) |
| Valuation                    of warrants issued                   |   |                            | -      |   |   | 605 |   |
|                                                              |   |                            |        |   |   |  |   |
| Balance                    - end of period                        |   | $                               | 1,027  |   | $ | 1,652 |   |

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

***Net      Loss Per Share***

|                                                           |   | **Year                  Ended June 30,** |   |
|----------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                           |   | **2007**                                 |   | **2006** |   | **2005** |   |
|                                                           |   |                                     |   |   |   |   |   |
| Net                  loss                                      |   | $                                        | (6,589 | ) | $ | (4,878 | ) | $ | (1,460 | ) |
|                                                           |   |                                     |   |   |   |   |   |   |   |   |
| Net                  loss per common share - basic and diluted |   | $                                        | (0.57  | ) | $ | (0.50 | ) | $ | (0.19 | ) |
|                                                           |   |                                     |   |   |   |   |   |   |   |   |
| Weighted                  average shares outstanding:          |   |                                     |   |   |   |   |   |   |   |   |
| Basic                  and diluted                             |   |                                     | 11,509 |   |   | 9,819 |   |   | 7,857 |   |

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

***Impairment      or Disposal of Long-Lived Assets***

***Identifiable      Intangible Assets and Goodwill***

***Asset      Retirement Obligation***

***Stock-Based      Compensation***

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                            |   | **Year                  Ended June 30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                                                                                            |   | **2005**                                 |   |
| Net                  loss, as reported                                                                                                          |   | $                                        | (1,460 | ) |
|                                                                                                                                            |   |                                     |   |   |
| Stock-based                  employee compensation expense                  not included in reported net loss,                  net of tax |   |                                     | (107   | ) |
|                                                                                                                                            |   |                                     |   |   |
| Net                  loss - pro forma                                                                                                           |   | $                                        | (1,567 | ) |
|                                                                                                                                            |   |                                     |   |   |
| Basic                  and diluted net loss per share - as Reported                                                                             |   | $                                        | (0.19  | ) |
| Basic                  and diluted net loss per share - Proforma                                                                                |   | $                                        | (0.20  | ) |

|                                   |   | **Year                Ended June 30,** |
|----------------------------------------|--------|----------------------------------------|
|                                   |   | **2007**                               |   | **2006** |   | **2005** |
|                                   |   |                                   |   |   |   |   |
| Risk                free interest rate |   | 4.7%                                   |   | 5.2% |   | 4.3% |
| Dividend                yield          |   | 0%                                     |   | 0% |   | 0% |
| Expected                volatility     |   | 106.5%                                 |   | 108.1% |   | 107.6% |
| Expected                life           |   | 7.9                years               |   | 7.9                years |   | 8.6                years |

***Reclassifications***

----

**SMF      ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND      SUBSIDIARIES**
** **

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

***Recent        Accounting Pronouncements***

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**
** **

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

**3.**
**IDENTIFIABLE        INTANGIBLE ASSETS AND GOODWILL**

|                                            |   | **2007**     |   | **2006**         |   |         |   |
|-------------------------------------------------|--------|--------------|--------|------------------|--------|--------------|--------|
|                                            |   | **Gross**    |   |             |   | **Net**      |   | **Gross** |   |   |   | **Net** |   |   |   |
|                                            |   | **Carrying** |   | **Accumulated**  |   | **Carrying** |   | **Carrying** |   | **Accumulated** |   | **Carrying** |   | **Estimated** |   |
|                                            |   | **Amount**   |   | **Amortization** |   | **Amount**   |   | **Amount** |   | **Amortization** |   | **Amount** |   | **Life** |   |
| Amortized                    intangible assets: |   |         |   |             |   |         |   |   |   |   |   |   |   |   |   |
| Customer                    relationships       |   | $            | 1,768  |             | $      | 253          |   | $ | 1,515 |   | $ | 1,768 |   | $ | 121 |   | $ | 1,647 |   |   | 15 |   |
| Favorable                    leases             |   |         | 196    |             |   | 68           |   |   | 128 |   |   | 196 |   |   | 29 |   |   | 167 |   |   | 5 |   |
| Trademarks                                      |   |         | 687    |             |   | 80           |   |   | 607 |   |   | 687 |   |   | 34 |   |   | 653 |   |   | 15 |   |
| Supplier                    contracts           |   |         | 801    |             |   | 280          |   |   | 521 |   |   | 801 |   |   | 120 |   |   | 681 |   |   | 5 |   |
| Total                                           |   | $            | 3,452  |             | $      | 681          |   | $ | 2,771 |   | $ | 3,452 |   | $ | 304 |   | $ | 3,148 |   |   |   |   |
|                                            |   |         |        |             |   |              |   |   |  |   |   |  |   |   |  |   |   |  |   |   |   |   |
| Goodwill                                        |   |         |   |             |   |         |   | $ | 228 |   |   |   |   |   |   |   | $ | 228 |   |   |   |   |

| Fiscal                  year: |   |   |   |
|-------------------------------|--------|--------|--------|
| 2008                          |   | $      | 381    |   |
| 2009                          |   |   | 371    |   |
| 2010                          |   |   | 357    |   |
| 2011                          |   |   | 208    |   |
| 2012                          |   |   | 157    |   |
| Thereafter                    |   |   | 1,297  |   |
|                          |   | $      | 2,771  |   |

**4.**
**LINE        OF CREDIT PAYABLE**

----

**SMF        ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)**

**AND        SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**5. LONG-TERM          DEBT**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |  **2007** |   |  **2006** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------------|--------|
| August                    2003 promissory notes (the “August 2003 Notes”) (10% interest due                    semi-annually, December 31 and June 30); remaining two principal                    payments of $752,800 and $552,600 due on August 28, 2007 and February                    28, 2008; balloon payment of $2,111,925 due at maturity on August                    28,                    2008; effective interest rate of 19.9% includes cost of warrants                    and other                    debt issue costs. The notes were issued as a result of the August                    29, 2003                    offering to institutions and other accredited lenders consisting                    of the                    $6.925 million notes and five-year warrants to purchase a total                    2,008,250                    shares of the Company’s common stock at $1.00 per share. The                    notes are collateralized by a first priority security interest in its                    specialized fueling truck fleet and related equipment and by                    patents on                    its proprietary fuel management system. The notes were subsequently                    refinanced on August 8, 2007. See Note 14 - Subsequent Event.                                                                                                                                                                                                                                                 |   | $              | 3,417  |           | $      | 5,540 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
| January                    2005 promissory notes (the “January 2005 Notes”) (10% interest due                    semi-annually, July 24 and January 24); remaining five principal                    payments                    of $540,000 due semi-annually on January 24 and July 24; balloon                    payment                    of $2,160,000 due at maturity on January 24, 2010; effective                    interest rate                    of 20.4% includes cost of warrants and other debt issue costs.                    The notes                    were issued as a result of a January 25, 2005 offering to a limited                    group                    of institutions and other accredited investors in connection                    with the                    acquisition of the assets and business of Shank Services consisting                    of                    $6.1 million in notes and four-year warrants to purchase 1,006,500                    shares                    of the Company’s common stock at $1.60. The January 2005 Notes are                    secured by a first priority security interest in the Shank Services                    assets. The notes were subsequently refinanced on August 8, 2007.                    See Note                    14 - Subsequent Event.                                                                                                                                                                                                                 |   |           | 4,860  |           |   | 6,100 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
| September                    2005 promissory notes (the “September 2005 Notes) (10% interest due                    semi-annually, February 28 and August 31); six principal payments                    of                    $300,000 due semi-annually on August 31 and February 28; balloon                    payment                    of $1,200,000 due at maturity on August 31, 2010; effective interest                    rate                    of 20.3% includes cost of warrants and other debt issue costs.                    The notes                    were issued as a result of a September 1, 2005 private debt placement                    with                    institutional and other accredited investors in order to fund                    the H &                    W acquisition discussed in Note 9, develop its operations and for                    other general working capital purposes. The offering consisted                    of $3.0                    million notes and four year warrants to purchase a total of 360,000                    shares                    of the Company’s common stock at an exercise price of $2.28 per share. The                    September 2005 Notes are secured by a first priority interest in the                    vehicles, equipment and other physical assets, other than inventory                    of H                    & W. The notes were subsequently refinanced on August 8, 2007.                    See                    Note 14 - Subsequent Event. |   |           | 3,000  |           |   | 3,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
| Various                    capital leases, interest rates range from 5.27% to 15.78%, monthly                    principal and interest payments, leases expire August 2006 to                    March                    2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |           | 26     |           |   | 148 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
| Unamortized                    debt discount, net of amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |           | (1,027 | )              |   | (1,652 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           | 10,276 |           |   | 13,136 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
| Less:                    current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |           | (26    | )              |   | (2,118 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |           |   |           |   |   |   |
| Long-term                    debt, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $              | 10,250 |           | $      | 11,018 |   |

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

***Conversion          Warrants***

***Other***

**6.**
**WARRANTS**

**          t**

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

***August          2003 Warrants***

***January          2005 Warrants***

***September          2005 Warrants***

***Conversion          Warrants***

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

| DateOfExercise                    |   | CommonSharesIssued |      | NoteConverted |   | PrincipalAmountConverted        |   | PrepaymentPenaltyReduction |      |
|-----------------------------------|--------|--------------------|-----------|---------------|--------|---------------------------------|--------|----------------------------|-----------|
|                              |   |               |      |          |   |                            |   |                       |      |
| March                    29, 2007 |   |               | 424,835   |          |   | January                    2005 |   | $                          | 630,000   |   | $ | 16,000 |   |
|                              |   |               |      |          |   |                            |   |                       |      |   |   |   |   |
| April                    3, 2007  |   |               | 203,651   |          |   | August                    2003  |   |                       | 302,000   |   |   | 8,000 |   |
|                              |   |               |      |          |   |                            |   |                       |      |   |   |   |   |
| May                    18, 2007   |   |               | 362,391   |          |   | August                    2003  |   |                       | 538,000   |   |   | 13,000 |   |
|                              |   |               |      |          |   |                            |   |                       |      |   |   |   |   |
| June                    18, 2007  |   |               | 66,406    |          |   | August                    2003  |   |                       | 99,000    |   |   | 2,000 |   |
|                              |   |               |      |          |   |                            |   |                       |      |   |   |   |   |
|                              |   |               | 1,057,283 |          |   |                            |   | $                          | 1,569,000 |   | $ | 39,000 |   |

***February          2007 Warrants***

**7.**
**SHAREHOLDERS’          EQUITY**

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**8.**
**STOCK          OPTIONS**

***Employee          Stock Options***

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                              |   |    **1996                    and 2000 Plans** |      |   **Weighted                    Average****Exercise                    Price** |   | **Weighted****Average****Remaining****Contractual****Term** |   |  **Aggregate****Intrinsic****Value****($000)** |   |
|-----------------------------------------------------------------------------------|--------|--------------------------------------------------------------|-----------|------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |
| Outstanding                    at June 30, 2004                                   |   |                                                         | 1,084,952 |                                                                                     | $      | 1.77                                                        |   |                                                |   |   |   |   |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Granted                                                                           |   |                                                         | 235,000   |                                                                                     | $      | 1.66                                                        |   |                                                |   |   |   |   |   |
| Cancelled                                                                         |   |                                                         | (44,000   | )                                                                                        | $      | 1.58                                                        |   |                                                |   |   |   |   |   |
| Exercised                                                                         |   |                                                         | (69,800   | )                                                                                        | $      | 1.37                                                        |   |                                                |   |   |   |   |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Outstanding                    at June 30, 2005                                   |   |                                                         | 1,206,152 |                                                                                     | $      | 1.78                                                        |   |                                                | 6.33   |   | $ | 479 |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Granted                                                                           |   |                                                         | 408,500   |                                                                                     | $      | 2.94                                                        |   |                                                |   |   |   |   |   |
| Cancelled                                                                         |   |                                                         | (167,200  | )                                                                                        | $      | 2.34                                                        |   |                                                |   |   |   |   |   |
| Exercised                                                                         |   |                                                         | (3,600    | )                                                                                        | $      | 1.24                                                        |   |                                                |   |   |   |   |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Outstanding                    at June 30, 2006                                   |   |                                                         | 1,443,852 |                                                                                     | $      | 2.05                                                        |   |                                                | 6.14   |   | $ | 1,179 |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Granted                                                                           |   |                                                         | 202,000   |                                                                                     | $      | 1.86                                                        |   |                                                |   |   |   |   |   |
| Cancelled                                                                         |   |                                                         | (113,000  | )                                                                                        | $      | 2.89                                                        |   |                                                |   |   |   |   |   |
| Exercised                                                                         |   |                                                         | —   |                                                                                     | $      | —                                                     |   |                                                |   |   |   |   |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Outstanding                    at June 30, 2007                                   |   |                                                         | 1,532,852 |                                                                                     | $      | 1.96                                                        |   |                                                | 5.71   |   | $ | 54 |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Exercisable                                                                       |   |                                                         | 1,069,052 |                                                                                     | $      | 1.76                                                        |   |                                                | 4.42   |   | $ | 52 |   |
|                                                                              |   |                                                         |      |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |
| Available                    for future grant (2000                    Plan only) |   |                                                         | 231,261   |                                                                                     |   |                                                        |   |                                                |   |   |   |   |   |

|                              |   | **Options                    Outstanding** |      | **Options                    Exercisable**                                                             |   |
|-----------------------------------|--------|--------------------------------------------|-----------|--------------------------------------------------------------------------------------------------------|--------|
| **Exercise****Price**             |   | **Number                    Outstanding**  |      | **Weighted****Average****Remaining                    Contractual****Life                    (years)** |   | **Weighted****Average****Exercise****Price** |   | **Number****of                    Shares Exercisable** |   | **Weighted****Average****Exercise****Price** |   |
| $                    .95 to $1.90 |   |                                       | 1,153,900 |                                                                                                   |   | 5.19 |   | $ | 1.48 |   |   | 946,900 |   | $ | 1.45 |   |
| $1.90                    to $2.85 |   |                                       | 112,500   |                                                                                                   |   | 8.54 |   | $ | 2.59 |   |   | 16,100 |   | $ | 2.50 |   |
| $2.85                    to $3.80 |   |                                       | 227,952   |                                                                                                   |   | 7.57 |   | $ | 3.37 |   |   | 67,552 |   | $ | 3.46 |   |
| $3.80                    to $4.75 |   |                                       | 15,000    |                                                                                                   |   | 1.81 |   | $ | 4.13 |   |   | 15,000 |   | $ | 4.13 |   |
| $5.70                    to $6.65 |   |                                       | 4,000     |                                                                                                   |   | 1.98 |   | $ | 6.56 |   |   | 4,000 |   | $ | 6.56 |   |
| $7.60                    to $8.54 |   |                                       | 19,500    |                                                                                                   |   | 2.26 |   | $ | 7.63 |   |   | 19,500 |   | $ | 7.63 |   |
| **Totals**                        |   |                                       | 1,532,852 |                                                                                                   |   |   |   |   |   |   |   | 1,069,052 |   |   |   |   |

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

***Director          Stock Options***

|                                            |   | **2001                    Plan** |    | **Weighted                    Average****Exercise                    Price** |   | **Weighted****Average****Remaining****Contractual****Term** |   | **Aggregate****Intrinsic****Value****($000)** |   |
|-------------------------------------------------|--------|----------------------------------|---------|------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |
| Outstanding                    at June 30, 2004 |   |                             | 219,375 |                                                                         | $      | 1.50                                                        |   |                                          |   |   |   |   |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Granted                                         |   |                             | 14,375  |                                                                         | $      | 1.93                                                        |   |                                          |   |   |   |   |   |
| Cancelled                                       |   |                             | — |                                                                         |   | —                                                     |   |                                          |   |   |   |   |   |
| Exercised                                       |   |                             | — |                                                                         |   | —                                                     |   |                                          |   |   |   |   |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Outstanding                    at June 30, 2005 |   |                             | 233,750 |                                                                         | $      | 1.52                                                        |   |                                          | 6.78   |   | $ | 155 |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Granted                                         |   |                             | 56,200  |                                                                         | $      | 2.73                                                        |   |                                          |   |   |   |   |   |
| Cancelled                                       |   |                             | — |                                                                         |   | —                                                     |   |                                          |   |   |   |   |   |
| Exercised                                       |   |                             | — |                                                                         |   | —                                                     |   |                                          |   |   |   |   |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Outstanding                    at June 30, 2006 |   |                             | 289,950 |                                                                         | $      | 1.75                                                        |   |                                          | 6.51   |   | $ | 253 |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Granted                                         |   |                             | 26,700  |                                                                         | $      | 1.65                                                        |   |                                          |   |   |   |   |   |
| Cancelled                                       |   |                             | — |                                                                         |   | —                                                     |   |                                          |   |   |   |   |   |
| Exercised                                       |   |                             | — |                                                                         |   | —                                                     |   |                                          |   |   |   |   |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Outstanding                    at June 30, 2007 |   |                             | 316,650 |                                                                         | $      | 1.74                                                        |   |                                          | 5.86   |   | $ | 17 |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Exercisable                                     |   |                             | 316,650 |                                                                         | $      | 1.74                                                        |   |                                          | 5.86   |   | $ | 17 |   |
|                                            |   |                             |    |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |
| Available                    for future grant   |   |                             | 33,350  |                                                                         |   |                                                        |   |                                          |   |   |   |   |   |

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

|                              |   | **Options                    Outstanding** |    | **Options                    Exercisable**                                                             |   |
|-----------------------------------|--------|--------------------------------------------|---------|--------------------------------------------------------------------------------------------------------|--------|
| **Exercise****Price**             |   | **Number                    Outstanding**  |    | **Weighted****Average****Remaining                    Contractual****Life                    (years)** |   | **Weighted****Average****Exercise****Price** |   | **Number****of                    Shares Exercisable** |   | **Weighted****Average****Exercise****Price** |   |
| $0.00                    to $0.95 |   |                                       | 3,125   |                                                                                                   |   | 5.76 |   | $ | 0.92 |   |   | 3,125 |   | $ | 0.92 |   |
| $0.95                    to $1.90 |   |                                       | 246,100 |                                                                                                   |   | 5.14 |   | $ | 1.51 |   |   | 246,100 |   | $ | 1.51 |   |
| $1.90                    to $2.85 |   |                                       | 59,925  |                                                                                                   |   | 8.51 |   | $ | 2.55 |   |   | 59,925 |   | $ | 2.55 |   |
| $2.85                    to $3.80 |   |                                       | 7,500   |                                                                                                   |   | 8.38 |   | $ | 3.30 |   |   | 7,500 |   | $ | 3.30 |   |
| **Totals**                        |   |                                       | 316,650 |                                                                                                   |   |   |   |   |   |   |   | 316,650 |   |   |   |   |

**9.**
**ACQUISITION**

***H          & W***

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**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

| Cash                    at closing                                                                                                                                            |   | $      | 82     |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Borrowings                    under line of credit                                                                                                                            |   |   | 1,454  |   |   |   |   |
| Acquisition                    costs — direct                                                                                                                           |   |   | 654    |   |   |   |   |
| Contingent                    earn out                                                                                                                                        |   |   | 2,463  |   |   |   |   |
| Total                    purchase price                                                                                                                                       |   |   |   |   | $      | 4,653  |   |
|                                                                                                                                                                          |   |   |        |   |   |   |   |
| Less:                    Fair value of identifiable assets acquired:                                                                                                          |   |   |        |   |   |   |   |
| Cash                                                                                                                                                                          |   |   | 392    |   |   |   |   |
| Plant,                    property and equipment                                                                                                                              |   |   | 1,767  |   |   |   |   |
| Accounts                    receivable (Includes $250 from Harkrider)                                                                                                         |   |   | 5,961  |   |   |   |   |
| Inventory                                                                                                                                                                     |   |   | 3,565  |   |   |   |   |
| Other                    current assets                                                                                                                                       |   |   | 249    |   |   |   |   |
| Fair                    value of identifiable assets acquired                                                                                                                 |   |   |   |   |   | 11,934 |   |
|                                                                                                                                                                          |   |   |   |   |   |   |   |
| Plus:                    Fair value of liabilities assumed:                                                                                                                   |   |   |   |   |   |   |   |
| Line                    of credit payable (Includes $387 from Harkrider)                                                                                                      |   |   | 7,086  |   |   |   |   |
| Accounts                    payable and other liabilities                                                                                                                     |   |   | 5,510  |   |   |   |   |
| Capital                    lease obligations                                                                                                                                  |   |   | 282    |   |   |   |   |
| Current                    portion of long-term debt                                                                                                                          |   |   | 452    |   |   |   |   |
|                                                                                                                                                                          |   |   |   |   |   | 13,330 |   |
|                                                                                                                                                                          |   |   |   |   |   |   |   |
| Less:                    Contingent earn out not due yet                                                                                                                      |   |   |   |   |   | 2,463  |   |
|                                                                                                                                                                          |   |   |   |   |   |   |   |
| Excess                    of purchase price over fair value of net assets acquired to be                    allocated                    among intangible assets and goodwill |   |   |   |   | $      | 3,586  |        |

| Amortizable                    intangible assets:      |   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|--------|
| Customer                    relationships              |   | $      | 1,674  |   |
| Supplier                    contracts                  |   |   | 801    |   |
| Trademarks                                             |   |   | 687    |   |
| Favorable                    leases                    |   |   | 196    |   |
| Total                    amortizable intangible assets |   | $      | 3,358  |   |
|                                                   |   |   |   |   |
| Goodwill                                               |   | $      | 228    |   |

** **

|                                                          |   | **Year                    ended June 30,** |    |
|---------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                          |   | **2006**                                   |    |  **2005** |   |
|                                                          |   |                                       |    |    |   |
| Petroleum                    product, tax and service revenue |   | $                                          | 264,593 |   | $ | 188,014 |   |
| Cost                    of petroleum products tax and service |   |                                       | 250,751 |   |   | 176,572 |   |
| Gross                    Profit                               |   | $                                          | 13,842  |   | $ | 11,442 |   |
|                                                          |   |                                       |    |   |   |   |   |
| Net                    loss                                   |   | $                                          | (5,150  | ) | $ | (1,988 | ) |
|                                                          |   |                                       |    |   |   |   |   |
| Basic                    and diluted net loss per share       |   | $                                          | (0.52   | ) | $ | (0.25 | ) |

----

**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**10.**
**SIGNIFICANT          CUSTOMERS AND VENDORS**

**11.**
**INCOME          TAXES **

|                                                                                                                       |   | **Year                    Ended June 30,** |    |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                                                       |   | **2007**                                   |    | **2006** |   | **2005** |   |
|                                                                                                                            |   |                                       |    |   |   |   |   |   |   |   |
| Expected                      benefit for income taxesat                      the statutory Federal income tax rate of 34% |   | $                                          | 2,198   |   | $ | 1,659 |   | $ | 496 |   |
| Net                    operating loss carryforward adjustment                                                              |   |                                       | (49     | ) |   | — |   |   | — |   |
| Change                    in tax rate                                                                                      |   |                                       | — |   |   | — |   |   | (12 | ) |
| State                    income taxes                                                                                      |   |                                       | 134     |   |   | 273 |   |   | 81 |   |
| Other                                                                                                                      |   |                                       | (1      | ) |   | 11 |   |   | 6 |   |
| Nondeductible                    expenses                                                                                  |   |                                       | (38     | ) |   | (48 | ) |   | (10 | ) |
| Deferred                    tax valuation allowance                                                                        |   |                                       | (2,244  | ) |   | (1,895 | ) |   | (561 | ) |
| Benefit                    (provision) for income taxes                                                                    |   | $                                          | — |   | $ | — |   | $ | — |   |

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**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                           |   | **June                    30,** |    |
|----------------------------------------------------------------|--------|---------------------------------|---------|
|                                                           |   | **2007**                        |    | **2006** |   |
| Deferred                    tax assets:                        |   |                            |    |   |   |   |   |
| Net                    operating loss carryforwards            |   | $                               | 9,524   |   | $ | 7,574 |   |
| Asset                    basis adjustment for Section 357 gain |   |                            | 155     |   |   | 189 |   |
| Reserves                    and allowances                     |   |                            | 371     |   |   | 360 |   |
| Intangible                    assets                           |   |                            | 188     |   |   | — |   |
| Stock-based                    compensation expense            |   |                            | 394     |   |   | 203 |   |
| Accrued                    expenses and deferred income        |   |                            | 429     |   |   | 412 |   |
| Other                                                          |   |                            | 133     |   |   | 126 |   |
|                                                           |   |                            |    |   |   |   |   |
| Total                    gross deferred tax assets             |   |                            | 11,194  |   |   | 8,864 |   |
|                                                           |   |                            |    |   |   |   |   |
| Less:                    valuation allowance                   |   |                            | (8,984  | ) |   | (6,740 | ) |
|                                                           |   |                            |    |   |   |   |   |
| Total                    deferred tax assets                   |   |                            | 2,210   |   |   | 2,124 |   |
|                                                           |   |                            |    |   |   |   |   |
| Deferred                    tax liabilities:                   |   |                            |    |   |   |   |   |
| Property                    and equipment                      |   |                            | (2,210  | ) |   | (2,124 | ) |
|                                                           |   |                            |    |   |   |   |   |
| Total                    deferred tax liabilities              |   |                            | (2,210  | ) |   | (2,124 | ) |
| Net                    deferred tax assets                     |   | $                               | — |   | $ | — |   |

** **

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**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**12.**
**COMMITMENTS          AND CONTINGENCIES**

***Operating          Leases***

| **Year                    Ended****June                      30,** |   |  **Operating                    Lease****Payments** |   |
|--------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                               |   |                                                |   |
| 2008                                                               |   | $                                                        | 1,106  |   |
| 2009                                                               |   |                                                     | 911    |   |
| 2010                                                               |   |                                                     | 801    |   |
| 2011                                                               |   |                                                     | 549    |   |
| 2012                                                               |   |                                                     | 416    |   |
| Thereafter                                                         |   |                                                     | 481    |   |
|                                                               |   |                                                     |   |   |
|                                                               |   | $                                                        | 4,264  |   |

***Governmental          Regulation***

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**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

***Employment          Agreements***

***Litigation***

**13.**
**RELATED          PARTY**

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**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**14.**
**SUBSEQUENT          EVENTS**

***Promissory          Note, Equity Offering and Warrants***

** **

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**SMF            ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)            **

**AND            SUBSIDIARIES**

**NOTES            TO CONSOLIDATED FINANCIAL STATEMENTS**

**15.**
**QUARTERLY          FINANCIAL DATA (unaudited)**

|                                                    |   | **Fiscal                    2007 Quarter Ended** |   |
|---------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                    |   | **September                    30,**             |   |  **December                    31,** |   |  **March                    31,** |   |  **June                    30,** |   |
|                                                    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Total                    revenue                        |   | $                                                | 65,628 |   | $ | 54,798 |   | $ | 51,817 |   | $ | 57,526 |   |
| Gross                    profit                         |   |                                             | 4,122  |   |   | 3,110 |   |   | 2,478 |   |   | 2,921 |   |
| Selling,                    general and administrative  |   |                                             | 3,650  |   |   | 4,159 |   |   | 4,077 |   |   | 3,950 |   |
| Operating                    income (loss)              |   |                                             | 472    |   |   | (1,049 | ) |   | (1,599 | ) |   | (1,029 | ) |
| Interest                    expense and other           |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| income,                    net                          |   |                                             | (934   | ) |   | (846 | ) |   | (1,019 | ) |   | (585 | ) |
| Net                    income (loss)                    |   |                                             | (462   | ) |   | (1,895 | ) |   | (2,618 | ) |   | (1,614 | ) |
|                                                    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    and diluted net loss per share |   | $                                                | (0.04  | ) | $ | (0.18 | ) | $ | (0.23 | ) | $ | (0.12 | ) |
|                                                    |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    and diluted weighted average   |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| number                    of shares outstanding         |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| during                    the period                    |   |                                             | 10,496 |   |   | 10,523 |   |   | 11,600 |   |   | 13,678 |   |

|                                                    |   |   | **Fiscal                    2006 Quarter Ended** |   |
|---------------------------------------------------------|--------|--------|--------------------------------------------------|--------|
|                                                    |   |   | **September                    30,**             |   |   | **(2)****December                      31,** |   |   | **(3)****March                      31,** |   |   | **(3)****June                      30,** |   |
|                                                    |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Total                    revenue (1)                    |   | $      | 52,796                                           |   | $ | 66,376 |   | $ | 59,296 |   | $ | 70,231 |   |
| Gross                    profit                         |   |   | 3,813                                            |   |   | 3,829 |   |   | 2,258 |   |   | 2,509 |   |
| Selling,                    general and administrative  |   |   | 2,534                                            |   |   | 3,007 |   |   | 3,569 |   |   | 4,152 |   |
| Operating                    income (loss)              |   |   | 1,279                                            |   |   | 822 |   |   | (1,311 | ) |   | (1,643 | ) |
| Interest                    expense and other           |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| income,                    net (4)                      |   |   | (675                                             | )      |   | (964 | ) |   | (905 | ) |   | (1,481 | ) |
| Net                    income (loss)                    |   |   | 615                                              |   |   | (142 | ) |   | (2,216 | ) |   | (3,135 | ) |
|                                                    |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Net                    income (loss) per share:         |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Basic                                                   |   | $      | 0.07                                             |   | $ | (0.01 | ) | $ | (0.23 | ) | $ | (0.30 | ) |
| Diluted                                                 |   | $      | 0.06                                             |   | $ | (0.01 | ) | $ | (0.23 | ) | $ | (0.30 | ) |
|                                                    |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Weighted                    average shares outstanding: |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Basic                                                   |   |   | 9,339                                            |   |   | 9,776 |   |   | 9,814 |   |   | 10,350 |   |
| Diluted                                                 |   |   | 10,197                                           |   |   | 9,776 |   |   | 9,814 |   |   | 10,350 |   |

| (1) | Certain                    revenue amounts have been reclassified to cost of goods sold                    to conform to                    the current period presentation. These changes had no impact                    on previously                    reported results of operations or shareholders’ equity. In accordance with                    EITF Issue No. 04-13, “Accounting for Purchases and Sales of Inventory                    with the Same Counterparty”, the Company has reclassified its treatment of                    reporting for sales of inventory to Company’s vendors from a gross basis                    to a net basis (net of service charges). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SMF              ENERGY CORPORATION (FORMERLY KNOWN AS STREICHER MOBILE FUELING, INC.)              **

**AND              SUBSIDIARIES**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS**

| (2) | The                    Company acquired H & W Petroleum on October 1,                    2005. |
|-----|----------------------------------------------------------------------------------------------------|

| (3) | The                    Company incurred a net loss of $2.2 million and $3.1 million                    for the                    quarters ended March 31, 2006 and June 30, 2006, respectively,                    primarily                    due to increased selling, general and administrative costs and                    interest                    expense associated with the H                    & W acquisition, corporate infrastructure development and relocation                    and integration costs. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The                    Company recorded additional non-cash interest expense of                    $537,000 during                    the quarter ended June 30, 2006 associated with the write-off                    of deferred                    debt costs, debt discount and a prepayment penalty related to                    the June 30,                    2006 issuance of warrants to convert a portion of the August                    2003 and                    January 2005 Notes. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----