UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended:  JUNE 30, 2003

                                       OR

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

For the transition period from ____________________ to ____________________

                         Commission file number: 0-21825

                         STREICHER MOBILE FUELING, INC.
             (Exact name of registrant as specified in its charter)

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

    800 WEST CYPRESS CREEK ROAD, SUITE 580, FORT LAUDERDALE, FLORIDA 33309
             (Address of principal executive offices) (Zip Code)

                                 (954) 308-4200
              (Registrant's telephone number, including area code)

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

                          COMMON STOCK, $.01 PAR VALUE
                    REDEEMABLE COMMON STOCK PURCHASE WARRANTS

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]   No [ ]

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

     The aggregate market value of the voting stock held by non-affiliates was
$9,785,421. The aggregate market value was computed by reference to the last
sale price of the registrant's Common Stock on the NASDAQ Stock Market on
September 30, 2003.

     As of September 30, 2003 there were 7,248,460 shares of the Registrant's
Common Stock outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Certain Portions of Registrant's Proxy Statement relating to the 2003 Annual
Meeting of Shareholders are incorporated by reference into Part III.

<PAGE>

                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS

     Streicher Mobile Fueling, Inc., a Florida corporation (the "Company")
formed in 1996, provides mobile fueling and fuel management out-sourced services
to businesses that operate fleets of vehicles and equipment of various sizes,
including governmental agencies, utilities, trucking companies, bus lines,
hauling and delivery services, courier services, construction companies and
others. The Company's specialized truck fleet delivers fuel to customers'
locations on a regularly scheduled or as needed basis, refueling vehicles and
equipment and/or re-supplying fixed-site storage facilities. The Company's
patented proprietary electronic fuel tracking control system is used to measure,
record and track fuel dispensed to each vehicle and tank fueled at a customer
location, allowing verification of the amount and type of fuel delivered and
providing customers with customized fleet fuel data for management analysis and
tax reporting.

     The Company's mobile fueling services provide numerous advantages to its
customers, including lower labor and administrative costs associated with
fueling vehicles, centralized control over fuel inventories and usage, tax
reporting benefits, elimination of costs and the risk of environmental
liabilities associated with on-site fuel storage and dispensing facilities,
lower risk of employee theft of fuel, emergency fuel availability, and the
elimination of security risks associated with off-site fueling by employees.

     The Company presently operates over 100 custom mobile fueling trucks from
13 service locations in California, Florida, Georgia, North Carolina, Tennessee
and Texas and is seeking to increase market penetration in its existing service
areas and to develop its operations in new markets.

THE MOBILE FUELING INDUSTRY

     Traditionally, businesses and other entities that operate fleets of
vehicles and equipment have met their fueling requirements by either maintaining
their own supply of fuel in on-site storage tanks or fueling vehicles at retail
stations and other third party facilities.

     On-site storage tanks and fueling facilities can be expensive to construct
and maintain, and expose the property owner and operator to potential liability
associated with fuel leaks or spills. In addition, increasingly stringent
federal and state environmental regulation of underground storage tanks may
require businesses that maintain their own fuel supplies to spend significant
amounts to remove, retrofit and/or to maintain underground and aboveground
storage tanks to meet regulatory standards. The Company believes that many fleet
operators currently utilizing on-site storage tanks will choose to meet their
fueling requirements by other means, including mobile fueling, instead of
investing in upgrading and/or maintaining existing facilities.

     The fueling of vehicles at retail stations and other third party facilities
by fleet operators can result in a higher cost of operations due to inefficient
use of employee time, the creation of significant unnecessary paperwork and
employee fraud. While large users may be able to negotiate favorable fuel
pricing from retail stations or other fuel suppliers, the labor cost incurred in
connection with employee fueling of vehicles and the costs associated with
management and administration of fuel purchases, can exceed the benefits
associated with price discounts.

     Specifically, mobile fueling and fuel management out-sourced services offer
numerous benefits over traditional fueling methods:

     o    Reduces Operating Costs and Increases Labor Productivity. Mobile
          fueling enables fleet operators to reduce operating costs, lowering
          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, increasing labor
          productivity by allowing employees to use their vehicles during time
          that would otherwise be spent fueling and maximizing vehicle use as
          fueling is conducted during non-operating hours. The running fuel
          necessary to operate vehicles is reduced as fueling takes place at
          customer locations. Mobile fueling

<PAGE>

          also reduces the administrative burden required to manage fuel
          programs and monitor vehicle utilization.

     o    Provides Centralized Inventory Control and Management. The Company's
          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 fueled
          by the Company. This eliminates customers' need to invest working
          capital to carry fuel supplies, allow customers to centralize their
          fuel inventory controls, track and analyze vehicle movement and fuel
          consumption for management and tax reporting purposes.

     o    Provides Tax Reporting Benefits. The ability of the Company's fuel
          management system to track fuel consumption to specific vehicles and
          fuel tanks provides tax benefits to customers who consume 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
          such uses, the customers receive reports which provide them with the
          information required to substantiate such tax exemptions.

     o    Eliminates 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 mobile fueling,
          customers avoid potential liabilities to employees and equipment from
          fuel storage and handling. Mobile fueling eliminates customers'
          expensive and inefficient use of business space and the diminution of
          property values associated with environmental concerns.

     o    Prevents Fuel Theft. Fleet operators that rely 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. The Company's fuel management system eliminates the
          risk of employee theft by dispensing fuel only to authorized vehicles.
          Utilizing an independent contractor such as the Company for fueling
          services rather than allowing employees to purchase fuel at local
          retail stations also eliminates employee fraud due to credit card
          abuse.

     o    Provides Emergency Fuel Supplies and Security. Emergency preparedness,
          including fuel availability, is critical to the operation of
          utilities, delivery services and other fleet operators. The Company
          provides access to emergency fuel supplies at times and locations
          chosen by its customers, allowing customers 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 interruption, supply outages or access and
          other natural limitations. In addition, security concerns of fleet
          operators to terrorism, hijacking and sabotage is increasing. The
          mobile fueling of vehicles at the customers' facilities eliminates
          security risks to the fleet operators' employees and equipment
          associated with fueling at retail service stations and other third
          party facilities.

MARKETING AND CUSTOMERS

     The Company markets its mobile fueling services to customers operating all
size fleets of vehicles and equipment in connection with their business,
including governmental agencies, utilities, trucking companies, bus lines,
hauling and delivery services, courier services, construction companies and
others. While large fleet operators offer immediate market penetration on a
regional basis, small fleet operators are equally important accounts because
they provide geographic density which optimizes fuel delivery efficiency and
minimizes cost. Once engaged to provide mobile fueling services, the Company is
usually the exclusive service provider for the fueling of a customer's entire
fleet or of a particular location of vehicles and equipment in a market.

     The Company focuses its marketing efforts on fleet operators within
established service areas. Fleet size and type, fuel requirements, fueling
logistics and credit worthiness are factors in identifying potential new
customers

                                       2

<PAGE>

for the Company's services. Direct marketing is the primary method of developing
new business. Referrals from existing customers and Company personnel are also
important sources of potential business. In addition, the Company is actively
developing new service markets. A minimum level of business commitments is
required prior to the Company's entry into any new market. The ability to
provide service to an existing customer in a new market and the identification
of local new customers meeting the Company's criteria are strong considerations
in a decision to enter any market. Based on a pre-established customer base and
the identification of significant business opportunities, the Company commenced
operations in Greensboro, North Carolina at the end of fiscal year June 30,
2003.

     The Company currently distributes diesel, gasoline and alternative fuels to
approximately 700 customers. Revenue (excluding fuel taxes) from one large
customer, the United States Postal Service, totaled $8.5 million or 16% of total
revenue, and $8.4 million or 19% of total revenue in the fiscal years ended June
30, 2003 and 2002, respectively. However, revenue from this customer was
generated from a total of 9 and 10 separate and non-interdependent written
contracts of varying lengths of service and renewal options for the years ended
June 30, 2003 and 2002, respectively. Revenue from two large customers,
excluding fuel taxes, totaled approximately $5.8 million or 26% of total
revenue, excluding fuel taxes, in the five-month period ended June 30, 2001.
Revenue from three large customers, excluding fuel taxes, totaled $12.1 million
or 19% in the fiscal year ended January 31, 2001. Although the Company does have
formal, length of service written contracts with certain of its larger
customers, such agreements are not customary in the mobile fueling business and
have not been entered into by the Company with the majority of its customers.
Therefore, most of the Company's customers can terminate the Company's mobile
fueling services at any time and for any reason, and the Company can similarly
discontinue service to any customer. The Company would discontinue service to a
customer if changes in the service conditions or other factors cause the Company
not to meet its minimum level of margins and rates, and the Company is unable to
re-negotiate its arrangement with the customer.

     The Company competes with other distributors of fuel, including several
regional distributors and numerous small independent operators who provide
mobile fueling services. The Company also competes with retail marketing where
fleet operators have the option of fueling their own equipment at retail
stations and other third-party service locations. The Company's ability to
compete is dependent on numerous factors, including price, delivery
dependability, credit terms, service locations, as well as the level of
reporting and invoicing services provided. In July 2003, the Company's largest
direct competitor in the markets served by the Company discontinued its
operations. The Company has obtained some customer business previously provided
by this competitor and believes that it has an opportunity to materially
increase its mobile fueling deliveries by successfully competing with the
successors to that business.

TRUCK FLEET AND OPERATIONS

     The Company currently operates from 13 service locations in California,
Florida, Georgia, North Carolina, Tennessee, and Texas. The Company delivers
fuel utilizing its own fleet of over 100 custom mobile fueling trucks with
multi-compartmented tanks whose fuel carrying capacities range from 2,800 to
4,400 gallons. These trucks are equipped with the Company's patented proprietary
electronic fuel management system which records and regulates fuel flow into the
customers' vehicles. Generally, each truck services between five and fifteen
customer locations per night or day, on specified delivery routes, depending on
customer size and fueling logistics. The fuel supply to be delivered is acquired
daily at local third-party terminal storage facilities. Each truck is operated
by a driver who also handles the actual fueling of the customers' vehicles
("fueler/operator").

FUEL TRACKING AND REPORTING SYSTEM

     The Company utilizes a patented proprietary fuel tracking and reporting
management system in its mobile fueling operations. It owns all patents covering
the system, the rights to which are registered with the United States Patent and
Trademark Office. The Company believes its system to be the first and only one
specifically designed to meet the demands and rigors of mobile fueling, and the
only one certified for accuracy by The National Conference on Weights and
Measures. Data is derived from the Fuel Tracking Controller ("FTC") Computer
which is installed on each truck and is linked to the Company's fueler/operator
by a hand-held radio controlled scanning and transmitting device. The FTC
Computer is programmed to control any variety of truck configurations, including

                                       3

<PAGE>

single or multiple products and any number of pumps and hoses attached to the
truck. The FTC fuel management system electronically records date, time,
customer vehicle identification number, product type and volume of fuel
delivered by the Company's trucks into each customer vehicle. For security and
tracking purposes, the FTC Computer will not permit fuel to be dispensed from
the Company's truck unless both the customer's fleet yard and the individual
vehicle or piece of equipment to be fueled are electronically verified by the
FTC Computer registration. All fueling transactions are recorded on the truck's
FTC Computer, downloaded at the Company's service locations and transmitted to
the Company's corporate headquarters where the data is assimilated into detailed
service reports and invoices for the customer. This information can be delivered
to the customer by a number of methods, including the internet, and certain data
may also be delivered to the customer at his vehicle location at the time of
fueling.

     As some service applications require both mobile fueling and the use by the
customer of his own on-site storage tanks, the Company has adapted the FTC
Computer to track the use by the customer of its own fixed-site tanks. Upon
installation of an FTC Computer, the Company services and manages fuel delivery
to a customer's on-site storage tank, providing reports detailing fuel dispensed
from the tank into each of the customer's vehicles, either alone or in
combination with the customer's mobile fueling use.

FUEL SUPPLY

     Diesel fuel and gasoline are commodities which are refined and distributed
by numerous sources. The Company purchases the fuel delivered to its customers
from multiple suppliers at daily market prices and in some cases qualifies for
volume discounts. The Company monitors fuel prices and trends in each of its
service markets on a daily basis and seeks to purchase its supply at the lowest
prices and under the most favorable terms. Commodity price risk is mitigated as
the Company purchases and delivers its fuel supply daily and utilizes cost-plus
pricing to its customers. The Company also handles the delivery of customer and
third-party supplied fuel.

EXECUTIVE OFFICERS

     The executive officers of the Company as of September 30, 2003 are as
follows:

         Name            Age            Position and Office
----------------------   ---   -----------------------------------------------
Richard E. Gathright..   49    President, Chief Executive Officer and Director

Michael S. Shore......   35    Senior Vice President, Chief Financial Officer,
                                   Secretary and Treasurer

Gary G. Williams......   47    Senior Vice President, Commercial Operations

Paul C. Vinger........   33    Senior Vice President, Corporate Planning and
                                   Fleet Operations

Timothy W. Koshollek..   39    Vice President, Marketing and Sales

     MR. GATHRIGHT has been Chief Executive Officer and President of the Company
since November 2000 and a Director since March 2001. He is responsible for the
management of all business affairs of the Company, reporting directly to the
Board of Directors. He was an advisor on operational and financial matters to
the senior management of several domestic and international energy companies
from January 2000 through October 2000. From September 1996 to December 1999, he
was President and Chief Operating Officer of TransMontaigne Inc., a Denver-based
publicly owned company providing logistical services to major energy companies
and large industrial customers; a Director from April 1995 to December 1999;
Executive Vice President from April 1995 to September 1996; and from December
1993 to April 1995 was President and Chief Operating Officer of a predecessor of
TransMontaigne. From 1988 to 1993, he was President and Director of North
American Operations for Aberdeen Petroleum PLC, a London-based public company
engaged in international oil and gas operations, also serving on its Board of

                                       4

<PAGE>

Directors. Prior to joining Aberdeen, he held a number of positions in the
energy industry in the areas of procurement, operations and management of oil
and gas assets.

     MR. SHORE has been Senior Vice President, Chief Financial Officer,
Secretary and Treasurer since February 2002. Prior to joining the Company, he
was CEO and President of Shore Strategic and Financial Consulting, providing
financial, management and information systems technology services to corporate
clients in the United States and Latin America. From 1998 to 2000, he served as
Director of Finance/Controller for the North American Zone Operations of
Paris-based Club Mediterranee. From 1996 to 1998, he was Vice President of
Finance for Interfoods of America, Inc., the largest Popeyes Fried Chicken &
Biscuits franchisee. From 1994 to 1996, he was the Manager of Accounting for
Arby's, Inc. Mr. Shore began his professional career in 1990 with Arthur
Andersen LLP where he became a Senior Auditor.

     MR. WILLIAMS has been Senior Vice President, Commercial Operations for the
Company since February 2001, responsible for Marketing and Sales and Product
Procurement. From 1995 to February 2001, he was Vice President of Marketing for
the supply, distribution and marketing subsidiary of TransMontaigne Inc.,
managing wholesale marketing functions in the Mid-Continent, Southeast and
Mid-Atlantic and serving on that company's senior risk management committee.
From 1987 to 1995, he was Regional Manager for Kerr-McGee Refining Corporation,
responsible for unbranded petroleum product sales in its southeastern United
States 11 state marketing region. Prior to 1987, Mr. Williams held various
positions in the product procurement, marketing and sales, and trucking sectors
of the petroleum industry.

     MR. VINGER has been Vice President, Corporate Planning and Operations for
the Company since August 2001, managing fleet and field operations and
responsible for corporate planning and analysis; and from December 2000 to
August 2001, he was Director of Corporate Planning. He was Senior Analyst of
Corporate Planning and Finance for TransMontaigne Inc., from September 1998 to
December 2000, responsible for operations and acquisitions analyses and the
management of supply scheduling and product allocations. From 1997 to 1998, he
was a Manager of Terminal Operations for TransMontaigne Inc. responsible for
petroleum product and chemical terminals. From 1994 to 1997, he was a Research
Associate for E. I. Dupont. From 1991 to 2001, Mr. Vinger served to the rank of
Captain in the United States Military.

     MR. KOSHOLLEK has been Vice President, Marketing for the Company since
March 1998. From October 1996 to March 1998, he was Vice President of Marketing
and Operations for the Company and from 1994 to October 1996 served in the same
position for Streicher Enterprises, Inc., the Company's predecessor. From 1992
to 1993, he was an owner and the General Manager of Premier Wholesale Seafood
Exchange, Inc. From 1989 to 1992, he was the Operations Manager of Streicher
Enterprises, Inc. responsible for its Southeast division fuel delivery
operations. From 1986 to 1988, Mr. Koshollek was Sales and Maintenance Manager
of Kay Yacht Management, Inc., responsible for new customer sales, set-up and
maintenance programs.

EMPLOYEES

     At June 30, 2003, the Company had 148 full-time employees.

GOVERNMENTAL REGULATION

     The Company's operations are affected by numerous federal, state and local
laws, regulations and ordinances, including those relating to protection of the
environment and worker safety. Various federal, state and local agencies have
broad powers under these laws, regulations and ordinances. In particular, the
operation of the Company's mobile fueling fleet and its transportation of diesel
fuel and gasoline are subject to extensive regulation by the U.S. Department of
Transportation ("DOT") under the Federal Motor Carrier Safety Act ("FMCSA") and
the Hazardous Materials Transportation Act ("HMTA"). The Company is subject to
regulatory and legislative changes that can affect the economics of the industry
by requiring changes in operating practices or influencing the demand for, and
the cost of providing, its services. In addition, the Company depends on the
supply of diesel fuel and gasoline from the oil and gas industry and, therefore,
is affected by changing taxes, price controls and other laws and regulations
generally relating to the oil and gas industry. The Company cannot determine the
extent to which its

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<PAGE>

future operations and earnings may be affected by new legislation, new
regulations or changes in existing regulations.

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

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


CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

     The following important factors have affected, and may in the future
continue to affect, the Company's business, results of operations and financial
condition, and could cause the Company's operating results to differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company elsewhere in this report.

     NO ASSURANCES OF FUTURE PROFITABILITY; LOSSES FROM OPERATIONS; NEED FOR
CAPITAL. The Company incurred net losses for the fiscal years ended June 30,
2003 and 2002 as well as the transition period ended June 30, 2001. The Company
earned a profit in the fiscal year ended January 31, 2000, the fourth quarter
ended June 30, 2002 and the first quarter ended September 30, 2002. In order for
the Company to earn profits in the future, it needs to increase volumes at
profitable margins, control costs and generate sufficient cash flow to support
its working capital and debt service requirements. There is no assurance that
management will be able to accomplish its business plan, or that it will be able
to continue to raise capital to support a working capital or debt service
shortfall during any business downturns.

     TRADING MARKET FOR THE COMPANY'S COMMON STOCK. The Company's common stock
is thinly traded which could make it difficult for shareholders to sell shares
at a predictable price or at all. In addition, there may be volatility in the
market price of the Company's common stock due to factors beyond the Company's
control. The Company's quarterly operating results, changes in general
conditions in the economy, the financial markets or other developments affecting
the Company could cause the market price of the Company's common stock to
fluctuate, making it difficult for shareholders to sell shares at predictable
prices or times.

     GROWTH DEPENDENT UPON EXPANSION; RISKS ASSOCIATED WITH EXPANSION INTO NEW
MARKETS. A significant component of the Company's future growth strategy will be
to expand the Company's business into new service locations. The Company intends
to expand into additional major and secondary metropolitan areas. Expansion will
largely be dependent on the Company's ability to demonstrate the benefits of
mobile fueling to potential new customers; successfully establish and operate
new locations; hire, train and retain qualified management, operating, marketing
and sales personnel; finance capital expenditures and working capital
requirements; secure reliable sources of product supply on a timely basis and on
commercially acceptable credit terms; and successfully manage growth by
effectively supervising operations, controlling costs and maintaining
appropriate quality controls. The Company's growth will depend upon its ability
to achieve greater penetration in existing markets and to successfully penetrate
new markets. The Company may also seek to expand through the acquisition of
existing companies or their customer bases. During the fiscal year ended June
30, 2003, the Company commenced operations in the

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Greensboro, North Carolina market. However, there can be no assurance that the
Company will be able to successfully expand its operations.

     ACQUISITION AVAILABILITY; INTEGRATING ACQUISITIONS. The Company's future
growth strategy may involve the acquisition of mobile fueling companies,
wholesale fuel or petroleum lubricant distributors or other related entities and
businesses in existing and new markets. There can be no assurance that the
Company will be able to locate or make suitable acquisitions on acceptable terms
or that future acquisitions will be effectively and profitably integrated into
the Company. Acquisitions involve risks that could adversely affect the
Company's operating results, including management commitment; integration of the
operations and personnel of the acquired operations; write downs of acquired
intangible assets; and possible loss of key employees of the acquired
operations.

     DEPENDENCE ON KEY PERSONNEL. The future success of the Company will be
largely dependent on the continued services and efforts of Richard E. Gathright,
the Company's President and Chief Executive Officer, and other key personnel.
The loss of the services of Mr. Gathright or other key personnel could have a
material adverse effect on the Company's business and prospects. The Company's
success and plans for future growth will also depend on its ability to attract
and retain additional qualified management, operating, marketing, sales and
financial personnel. There can be no assurance that the Company will be able to
hire or retain such personnel on terms satisfactory to the Company. Mr.
Gathright and the Company have entered into an employment agreement which
expires October 31, 2004. The Company has also entered into written employment
agreements with certain other company officers.

     FUEL PRICING; EFFECT ON PROFITABILITY. Diesel fuel and gasoline are
commodities which are refined and distributed by numerous sources. The Company
purchases the fuel delivered to its customers from multiple suppliers at daily
market prices and in some cases qualifies for volume discounts. The Company
monitors fuel prices and trends in each of its service markets on a daily basis
and seeks to purchase its supply at the lowest prices and under the most
favorable terms. Commodity price risk is mitigated since the Company purchases
and delivers its fuel supply daily and utilizes cost-plus pricing to its
customers. If the Company cannot pass on the cost-plus pricing to its customers,
margins would decrease and a loss could be incurred. The Company has not engaged
in derivatives or futures trading to hedge fuel price movements.

     RISKS ASSOCIATED WITH CUSTOMER CONCENTRATION; ABSENCE OF WRITTEN
AGREEMENTS. Although the Company provides services to an extensive number of
customers, a significant portion of its revenue is generated from a few of its
larger customers. While the Company does have formal, length of service written
contracts with some of these larger customers, such agreements are not customary
in the mobile fueling business and have not been entered into by the Company
with the majority of its customers. As a result, most of the Company's customers
can terminate the Company's mobile fueling services at any time and for any
reason, and the Company can similarly discontinue service to any customer. The
Company may discontinue service to a customer if changes in the service
conditions or other factors cause the Company not to meet its minimum level of
margins and rates, and the pricing or delivery arrangements cannot be
re-negotiated. As a result of this customer concentration and absence of written
agreements, the Company's business, results of operations and financial
condition could be materially adversely affected if one or more of its large
customers were lost or if the Company were to experience a high rate of contract
terminations.

     MANAGEMENT OF GROWTH. The Company's future growth strategy is dependent on
effective operational, financial and other internal systems, and the ability to
attract, train, motivate, manage and retain its employees. If the Company is
unable to manage growth effectively, the Company's results of operations will be
adversely affected.

     COMPETITION. The Company competes with other mobile fueling service
providers, including several regional, and numerous small, independent operators
who provide these services. The Company also competes with retail marketing
where fleet operators have the option of fueling their own equipment at retail
stations and other third-party service locations. The Company's ability to
compete is dependent on numerous factors, including price, delivery
dependability, credit terms, service locations, and reporting and invoicing
services. There can be no assurance that the Company will be able to continue to
compete successfully as a result of these or other factors.

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     OPERATING RISKS MAY NOT BE COVERED BY INSURANCE. The Company's operations
are subject to all of the operating hazards and risks normally incidental to
handling, storing and transporting diesel fuel and gasoline, which are
classified as hazardous materials. The Company maintains insurance policies in
such amounts and with such coverages and deductibles as the Company believes are
reasonable and prudent. However, there can be no assurance that such insurance
will be adequate to protect the Company from liabilities and expenses that may
arise from claims for personal and property damage arising in the ordinary
course of business or that such levels of insurance will be maintained by the
Company or will be available at economical prices.

     GOVERNMENTAL REGULATION. See the discussion of governmental regulations and
their impact on the Company in the "Governmental Regulation" section above.

     CHANGES IN ENVIRONMENTAL REQUIREMENTS. The Company expects to derive future
business by converting fleet operators currently utilizing underground fuel
storage tanks for their fueling needs to mobile fueling. The owners of
underground storage tanks have been required to remove or retrofit those tanks
to comply with technical regulatory requirements pertaining to their
construction and operation. If other more economical means of compliance are
developed or adopted by owners of underground storage tanks, the opportunity for
the Company to market its services to such owners may be adversely affected.

ITEM 2.  DESCRIPTION OF PROPERTY

     The following table sets forth certain information concerning the property
and facilities that are owned or leased by the Company for use in its
operations:

                                                            Lease
                                                          Expiration
      Description            Location                   With All Options   Notes
      -----------            --------                   ----------------   -----
    Office                 Gardena, California              1/15/04         (1)
    Truck yard/parking     Gardena, California              3/31/04         (1)
    Corporate offices      Ft. Lauderdale, Florida           3/1/04         (1)
    Truck yard and office  Ft. Myers, Florida          90 days to 90 days   (1)
    Truck yard and office  Port Everglades, Florida          3/1/04         (1)
    Truck yard and office  Jacksonville, Florida            8/31/15         (1)
    Truck yard and office  Melbourne, Florida            Month to Month     (1)
    Truck yard and office  Orlando, Florida                  6/1/05         (1)
    Truck yard and office  Tampa, Florida                     N/A           (2)
    Truck yard and office  Doraville, Georgia               11/1/04         (1)
    Truck yard/parking     Greensboro, North Carolina    Month to Month     (1)
    Truck yard and office  Kingsport, Tennessee          Month to Month     (1)
    Truck yard and office  Chattanooga, Tennessee        Month to Month     (1)
    Truck yard and office  Houston, Texas                   3/31/04         (1)
    Truck yard and office  Ft. Worth, Texas                 12/31/04        (1)
---------------
(1) Leased.
(2) Property owned by the Company.

                                       8

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     The Company has no material legal proceedings pending. From time to time,
the Company may become a party to litigation incidental to its business. There
can be no assurance that any future legal proceedings will not have a material
adverse effect on the Company's business, reputation, financial condition or
results of operations.


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

     No matters were submitted to a vote of the security holders, through the
solicitation of proxies or otherwise, during the three months ended June 30,
2003.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

     The Company's common stock, par value $.01 ("common stock") and Redeemable
Common Stock Purchase Warrants ("warrants") have traded in the National
Association of Securities Dealers Automated Quotation System ("NASDAQ")
Small-Cap Market under the symbols "FUEL" and "FUELW", respectively, since
December 11, 1996, the date of the Company's initial public offering. The
following table sets forth, for the periods indicated, the high and low bid
prices for the common stock and warrants, as reported by NASDAQ.

                                           Common Stock         Warrants
                                           ------------         --------
                                           High     Low       High     Low
                                           ----     ---       ----     ---
    Year Ended June 30, 2003
    ------------------------
      1st quarter                          $1.33    $0.80     $0.08    $0.06
      2nd quarter                          $1.40    $0.72     $0.13    $0.01
      3rd quarter                          $1.09    $0.73     $0.11    $0.02
      4th quarter                          $1.07    $0.62     $0.27    $0.04

    Year Ended June 30, 2002
    ------------------------
      1st quarter                          $1.63    $1.10     $0.14    $0.06
      2nd quarter                          $1.40    $0.96     $0.08    $0.03
      3rd quarter                          $1.30    $0.98     $0.11    $0.06
      4th quarter                          $1.37    $1.00     $0.11    $0.07

    Transition Period Ended June 30, 2001
    -------------------------------------
      1st quarter                          $2.13    $1.00     $0.38    $0.12
      2 month                              $1.78    $1.25     $0.20    $0.06

    Year Ended January 31, 2001
    ---------------------------
      1st quarter                          $7.13    $4.00     $1.16    $0.50
      2nd quarter                          $4.25    $2.03     $0.50    $0.16
      3rd quarter                          $3.88    $1.00     $0.44    $0.13
      4th quarter                          $3.00    $1.00     $0.38    $0.06

     On June 30, 2003, the closing bid price of the common stock was $1.05 per
share and the closing bid price of the warrants was $0.10 per warrant. As of
June 30, 2003, there were approximately 44 holders of record of the Company's
common stock and approximately 490 beneficial owners of the Company's common
stock.

     To date, the Company has not declared or paid any dividends on its common
stock. The payment of dividends, if any, is within the discretion of the Board
of Directors and will depend upon the Company's earnings, its capital
requirements and financial condition and other relevant factors. The Board of
Directors does not intend to declare any dividends in the foreseeable future,
but instead intends to retain future earnings for use in the Company's business
operations.

                                       9

<PAGE>

ISSUANCES OF UNREGISTERED SECURITIES

     On January 15, 2002, certain holders of convertible subordinated promissory
notes converted an aggregate of $2,616,800 to unregistered shares of the
Company's common stock at a conversion price of $1.24 per share, for a total of
2,110,322 shares. The holders of the remaining $283,600 of convertible
promissory notes issued by the Company in 2001 (the "2001 Notes") who did not
convert their notes in January 2002 waived any conversion price adjustment. The
accrued quarterly interest earned on the 2001 Notes can be paid with shares of
the Company's common stock instead of cash, however two of these notes require
the prior written consent of the payee for such payment in shares.

     On December 23, 2002, the Company issued a $150,000 short-term promissory
note to a shareholder. The note was due on January 31, 2003, with interest at 5%
over the prime interest rate. On January 21, 2003 the Company and the holder of
the note substituted the note for a $150,000 subordinated promissory note due on
January 31, 2005, bearing interest at an annual rate of 9%. On January 21, 2003,
the Company issued $300,000 of subordinated promissory notes to two
shareholders. The notes are also due on January 31, 2005 and bear interest at an
annual rate of 9%. With the consent of the holders, interest on the notes may be
paid in the unregistered shares of Company's common stock, with the stock value
based on the closing bid price of the stock for the five trading days before the
last day of the quarter in which the interest is due but in no event less than
the closing bid price at the time of issuance or the average of the closing bid
prices for the five trading days prior to such time, whichever is lower
(collectively, the "January 2003 Notes").

     During the fiscal year ended June 30, 2003, the Company issued 22,417
shares of common stock to the holders of the 2001 and January 2003 Notes for
interest earned at prices ranging from $.99 to $1.35 per share. The offer and
sale of the 2001 and January 2003 Note, and the underlying shares into which the
notes are convertible or which are issued as payment of interest, were exempt
from registration under the Act as private offerings to "accredited investors"
under Section 4(2) and 4(6) of the Act and Rules 505 and 506 of Regulation D
thereunder.

     On May 12, 2003, the Company issued $300,000 of promissory notes to certain
shareholders (the "Shareholder Notes"). The notes bear interest at an annual
rate of 14% and are payable on demand. The offer and sale of the notes were
exempt from registration as private offerings to "accredited investors" under
Section 4(2) and 4(6) of the Act and Rules 505 and 506 of Regulation D
thereunder. The Company repaid $235,500 of those Shareholder Notes with the
proceeds of the May 20, 2003 private placement issuance of subordinated
promissory notes and common stock purchase warrants. (See below)

     On May 20, 2003, the Company issued $235,500 of subordinated promissory
notes to officers, directors and certain shareholders (the "May 2003 Notes").
The notes are due on November 19, 2003 and bear interest at an annual rate of
14%. With the consent of the holders, the Company may elect to pay interest on
the notes in shares of the Company's common stock, with the stock value based on
the most recent closing bid price of the stock at the time the notes were
executed or for the five trading days before such date, whichever is lower. The
Company also issued warrants to purchase 82,425 shares of common stock
exercisable at $0.86 per share in connection with the notes. The warrants issued
are exercisable for a period of three (3) years from and after the date on which
the notes are repaid or otherwise surrendered to the Company, but in no event
later than November 19, 2006. The offer and sale of the notes, the warrants and
the shares underlying the warrants were exempt from registration as private
offerings to "accredited investors" under Sections 4(2) and 4(6) of the Act and
Rules 505 and 506 of Regulation D thereunder. The Company has also agreed to
register the shares underlying the warrants for resale, which it intends to do
sometime after the filing of this Form 10-K.

     The Company repaid the 2001 Notes, the January 2003 Notes, the remaining
balance of the Shareholder Notes and the May 2003 Notes in September 2003 with
the proceeds of a private placement in August 2003 of $6.925 million in
promissory notes and common stock purchase warrants (the "August 2003 Promissory
Notes"). The Company issued warrants to purchase 2,008,250 shares of common
stock exercisable at $1.00 per share in connection with the August 2003
promissory notes. The offer and sale of the notes, the warrants and the shares
underlying the warrants were exempt from registration as private offerings to
"accredited investors" under Sections 4(2) and 4(6) of the Act and Rules 505 and
506 of Regulation D thereunder. The Company has also agreed to register the
shares underlying the warrants for resale, which it intends to do sometime after
the filing of this Form 10-K.

                                       10
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA

     The following selected financial data of the Company and its consolidated
subsidiaries are qualified in their entirety by, and should be read in
conjunction with, the Consolidated Financial Statements and related notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." The selected financial table below is for each of the fiscal years
ended June 30, 2003 and 2002, the transition period ended June 30, 2001, and the
fiscal years ended January 31, 2001, 2000, and 1999. Except for the unaudited
financial and statistical information section, and the unaudited selected
financial data for the fiscal year ended June 30, 2001 which is presented for
12-month comparison information only, the selected financial data is derived
from the audited Consolidated Financial Statements of the Company for the fiscal
years ended June 30, 2003 and 2002, the transition period ended June 30, 2001,
and the fiscal years ended January 31, 2001, 2000, and 1999.

<TABLE>
<CAPTION>
(in thousands, except net margin per gallon and per share data)
---------------------------------------------------------------------------------------------------------------------------------
                                                                                    Five-month
                                                     Fiscal Years Ended June 30,    Transition     Fiscal Years Ended January 31,
--------------------------------------------------------------------------------      Period       ------------------------------
                                                                                       Ended
                                                     2003      2002         2001   June 30, 2001    2001         2000       1999
---------------------------------------------------------------------------------------------------------------------------------
Selected Income Statement Data:                                       (Unaudited)
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>       <C>          <C>         <C>         <C>          <C>        <C>
Revenue, net of fuel taxes                         53,579    43,538       60,293      22,235      65,002       50,801     30,332
Gross profit                                        4,023     4,591        2,520         740       3,093        4,629      2,754
Operating profit (loss)                              (693)      209       (1,273)     (1,386)        241        1,559        (54)
Beneficial conversion of debt to equity
  interest expense                                     --      (241)          --          --          --           --         --
                                             ------------------------------------------------------------------------------------
Net income (loss)                                  (1,581)   (1,162)      (2,774)     (1,951)     (1,335)         472     (1,082)
Less: Beneficial conversion of debt to
  Equity interest expense                              --       241           --          --          --           --         --
                                             ------------------------------------------------------------------------------------
Net income (loss) adjusted for beneficial
  conversion interest expense                      (1,581)     (921)      (2,774)     (1,951)     (1,335)         472     (1,082)
=================================================================================================================================

---------------------------------------------------------------------------------------------------------------------------------
Per Share Data:
---------------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per share                   (0.22)    (0.20)       (0.84)      (0.47)      (0.49)        0.17      (0.42)
Diluted net income (loss) per share                 (0.22)    (0.20)       (0.84)      (0.47)      (0.49)        0.16      (0.42)
=================================================================================================================================

---------------------------------------------------------------------------------------------------------------------------------
Selected Balance Sheet Data:
---------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents                             211       815            6           6         447          353        123
Accounts receivable, net                            6,113     6,382        8,669       8,669       9,638        9,588      5,775
Bank line of credit payable                         4,410     4,680        6,905       6,905       7,286        7,679      4,571
Shareholders' equity                                4,111     5,676        3,332       3,332       5,218        4,289      3,360
Total Assets                                       16,011    18,560       22,194      22,194      24,645       23,931     16,194
=================================================================================================================================

---------------------------------------------------------------------------------------------------------------------------------
Financial and Statistical Information (Unaudited):
---------------------------------------------------------------------------------------------------------------------------------
EBITDA (1)                                            737     1,712          223        (748)      1,659        2,709        592
Working Capital (deficit) (4)                      (2,430)   (1,576)      (3,093)     (3,093)     (1,891)      (1,797)    (2,325)
Net Margin (2)                                      5,426     6,049        3,946       1,354       4,442        5,713      3,588
Net Margin per gallon (in dollars) (3)              0.115     0.122        0.073       0.062       0.077        0.096      0.086
Total Gallons (000's)                              47,294    49,500       54,102      21,800      57,600       59,400     41,900
=================================================================================================================================

---------------------------------------------------------------------------------------------------------------------------------
EBITDA Calculation (Unaudited):
---------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                  (1,581)   (1,162)      (2,774)     (1,951)     (1,335)         472     (1,082)
Add back:
  Interest expense                                    915     1,175        1,571         590       1,645        1,152        840
  Beneficial conversion of debt to
    equity interest expense                            --       241           --          --          --           --         --
  Depreciation and amortization expense             1,403     1,458        1,426         613       1,349        1,085        834
                                             ------------------------------------------------------------------------------------
EBITDA                                                737     1,712          223        (748)      1,659        2,709        592
=================================================================================================================================
</TABLE>
(1) EBITDA = Earnings before interest, taxes, depreciation and amortization.
(2) Net Margin = Gross profit plus depreciation
(3) Net margin per gallon = Net Margin / Total Gallons
(4) Working Capital (deficit)= current assets - current liabilities

                                       11
<PAGE>

<TABLE>
<CAPTION>
UNAUDITED QUARTERLY SELECTED FINANCIAL DATA FOR FISCAL YEAR ENDED JUNE 30, 2003 AND 2002

(in thousands, except net margin per gallon and per share data)
------------------------------------------------------------------------------------------------------------------------------------
                                                   June 30, 2003                                    June 30, 2002
                                                                                 YTD                                           YTD
Selected Income Statement Data:            Q1       Q2       Q3        Q4        2003       Q1        Q2       Q3       Q4     2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>      <C>      <C>       <C>       <C>        <C>       <C>       <C>    <C>     <C>
Revenue, net of fuel taxes               12,557   12,667   14,841    13,514    53,579     12,299    9,867     9,892  11,480  43,538
Gross profit                              1,393      744      889       997     4,023      1,167      965     1,169   1,290   4,591
Operating profit (loss)                     313     (632)    (272)     (102)     (693)        32     (182)       64     296     209
Beneficial conversion of debt to equity
  Interest expense                           --       --       --        --        --         --       --      (241)     --    (241)
                                        --------------------------------------------------------------------------------------------
Net income (loss)                           103     (858)    (501)     (325)   (1,581)      (307)    (515)     (405)     63  (1,162)
Less: Beneficial conversion of debt to
  equity interest expense                    --       --       --        --        --         --       --       241      --     241
                                        --------------------------------------------------------------------------------------------
Net income (loss) adjusted for
  beneficial conversion of debt
  to equity interest expense                103     (858)    (501)     (325)   (1,581)      (307)    (515)     (164)     63    (921)
====================================================================================================================================

------------------------------------------------------------------------------------------------------------------------------------
Per Share Data:
------------------------------------------------------------------------------------------------------------------------------------
Basic net income (loss) per share          0.01    (0.12)   (0.07)    (0.04)    (0.22)     (0.07)   (0.11)    (0.06)   0.01   (0.20)
Diluted net income (loss) per share        0.01    (0.12)   (0.07)    (0.04)    (0.22)     (0.07)   (0.11)    (0.06)   0.00   (0.20)
====================================================================================================================================

------------------------------------------------------------------------------------------------------------------------------------
Selected Balance Sheets Data:
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents                   314       21       --       211       211        163      183       402     815     815
Accounts receivable, net                  7,689    7,091    6,297     6,113     6,113      9,678    7,011     7,313   6,382   6,382
Bank line of credit payable               5,542    5,533    4,468     4,410     4,410      7,322    5,850     5,552   4,680   4,680
Shareholders' equity                      5,784    4,921    4,424     4,111     4,111      3,224    2,743     5,630   5,676   5,676
Total Assets                             18,947   18,005   16,498    16,011    16,011     22,616   20,013    19,816  18,560  18,560
====================================================================================================================================

------------------------------------------------------------------------------------------------------------------------------------
Financial and Statistical Information:
------------------------------------------------------------------------------------------------------------------------------------
EBITDA                                      677     (266)      77       249       737        416      194       449     653   1,712
Working Capital (Deficit)                (1,798)  (2,188)  (2,243)   (2,430)   (2,430)    (2,051)  (2,479)   (1,950) (1,576) (1,576)
Net Margin                                1,737    1,108    1,235     1,346     5,426      1,537    1,327     1,540   1,645   6,049
Net Margin per gallon (in dollars)        0.146    0.097    0.107     0.108     0.115      0.099    0.111     0.142   0.146   0.122
Total Gallons (000's)                    11,892   11,476   11,496    12,430    47,294     15,495   11,905    10,808  11,292  49,500
====================================================================================================================================
</TABLE>
(1) EBITDA = Earnings before interest, taxes, depreciation and amortization.
(2) Net Margin = Gross profit plus depreciation
(3) Net margin per gallon = Net Margin / Total Gallons
(4) Working Capital (deficit)= current assets - current liabilities

                                       12

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following discussion should be read in conjunction with the Company's
audited consolidated financial statements and related notes included elsewhere
in this Form 10-K.

     This report, including but not limited to this Item 7 and the footnotes to
the financial statements found in Section F, contains "forward looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). These statements concern expectations,
beliefs, projections, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.
Statements preceded by, followed by, or that include the words "believes,"
"expects," "anticipates," or similar expressions are generally considered to be
forward-looking statements.

     The forward-looking statements, include the following:

     o    The Company's beliefs regarding its position in the mobile fueling
          industry

     o    The Company's strategies, plans and objectives and expectations
          concerning its future operations, cash flow, margins, revenue,
          profitability, liquidity and capital resources

     o    The Company's efforts to improve operational, financial and management
          controls, reporting systems and procedures

     The forward-looking statements reflect the Company's current view about
future events and are subject to risks, uncertainties and assumptions. The
Company cautions readers of this report that certain important factors may have
affected, and could in the future affect, its actual results and could cause
actual results to differ significantly from those expressed in any
forward-looking statement. The following important factors, in addition to
factors discussed elsewhere in this report and in Item 1 under the caption
"Certain Risk Factors Affecting Future Operating Results," could prevent the
Company from achieving its goals, and cause the assumptions underlying the
forward-looking statements and the actual results to differ materially from
those expressed in or implied by those forward-looking statements:

     o    future net losses

     o    adverse consequences relating to the Company's outstanding debt

     o    the Company's ability to pay interest and principal on its bank line
          of credit, senior secured promissory notes and pay its accounts
          payable and other liabilities when due

     o    the Company's ability to comply with financial covenants contained in
          its $10 million bank line of credit

     o    the Company's ability to reach an agreement with its bank line of
          credit lender with regard to a waiver of possible covenant violations
          or an amendment to the financial covenants contained in its debt
          agreement in the event the Company were not in compliance with such
          financial covenants

     o    further provisions for bad debts on the Company's accounts receivable

     o    fluctuations in demand for the Company's mobile fueling services
          resulting from changed economic conditions

     o    the Company's ability to acquire sufficient trade credit from fuel
          suppliers and other vendors

     o    competitive pricing for the Company's services at acceptable net
          margins

                                       13

<PAGE>

GENERAL

     The Company generates substantially all of its revenue from providing
mobile fueling and fuel management services. Revenue is comprised principally of
delivery service charges and the related sale of diesel fuel and gasoline. Cost
of sales is comprised principally of direct operating expenses and the cost of
fuel. Included in both revenue and cost of sales are federal and state fuel
taxes, which are collected by the Company from its customers, when required, and
remitted to the appropriate taxing authorities.

     The Company provides mobile fueling and fuel management services at a
negotiated rate for service plus the cost of fuel based on market prices.
Revenue levels will vary depending on the upward or downward movement of fuel
prices in each market. For the fiscal year ended June 30, 2003, market prices
for fuel were substantially higher than for the fiscal year ended June 30, 2002
due to military events in the Middle East, refinery shutdowns in Venezuela and a
severe winter in the U.S. Northeast, and were primarily responsible for the
significant increases in both revenue and cost of sales notwithstanding
approximately 2,200,000 fewer gallons delivered during the fiscal year ended
June 30, 2003, as compared to the fiscal year ended June 30, 2002. The volume
decline was due primarily to the termination of unprofitable mobile fueling
service accounts and elimination of bulk delivery services in northern
California.

     In the mobile fueling business, the majority of deliveries are made on
workdays, Monday through Friday, to coincide with customers' fuel service
requirements. The number of workdays in any given month will impact the
quarterly financial performance of the Company. In addition, a downturn in
customer demand generally takes place on and/or in conjunction with national
holidays, resulting in decreased volumes of fuel delivered. This downturn may be
offset by emergency mobile fueling services and fuel deliveries to certain
customers resulting from impending or actual severe meteorological or geological
events, including hurricanes, tropical storms, ice and snow storms, forest fires
and earthquakes.

     In July 2003 the Company's largest competitor in the markets served by the
Company discontinued operations. Some of the volumes previously delivered by the
former competitor have been redirected to the Company and further redirection is
possible. In any event, the Company believes that it will increase deliveries
and generate incremental margins in those locations where it previously directly
competed, and it intends to enter other new locations where it is believed that
market share can be gained at profitable margins.

     The Company believes that there are significant opportunities to increase
the size of its mobile fueling and fuel management services business and the
volumes of fuel sold and delivered in conjunction with it. However, this growth
is dependent upon a number of business and economic factors, including, but not
limited to, the success of its sales and marketing efforts and other business
strategies; the availability of qualified personnel to provide the level of
service required by customers; the generation of cash flow from operating
activities; the availability of sufficient debt or equity capital to meet the
business requirements; and favorable market conditions in the related
transportation or petroleum industries, some of which factors are beyond the
Company's control.

CAPITAL RESOURCES AND LIQUIDITY

     In August 2003 the Company raised $6.925 million from the issuance of
five-year 10% promissory notes (the "August 2003 refinancing" and the "August
2003 promissory notes") and 2,008,250 five-year warrants to purchase the
Company's common stock at $1.00 per share. The notes are collateralized by a
first priority security interest in the Company's specialized fueling truck
fleet and related equipment and by the patents on its proprietary fuel
management system. The resulting liquidity impact of this financing transaction
has been the repayment of all outstanding equipment and subordinated debt; the
generation of $2.9 million of working capital for business expansion; and a $2.8
million improvement in cash flow resulting from a moratorium of principal
payments during the first two years of the five-year term of the notes.

     In its financial statements for the first quarter ended September 30, 2003
the Company expects to record a pre-tax gain of $757,000 from the prepayment of
the outstanding balance owed to its principal equipment lender; and an increase
in shareholders' equity of $1.84 million for the value of the 2,008,250 warrants
issued in connection with the August 2003 refinancing. During the period from
February 2001 to June 30, 2003, the Company raised in the

                                       14

<PAGE>

aggregate $6.7 million in equity capital through private placements of common
stock and the issuance of subordinated debt. During the year ended June 30,
2003, the Company raised $750,000 from the private placements of subordinated
debt, the proceeds from which have been used for working capital in the
Company's operations as well as the implementation of its business plan.

     In January 2002, certain holders of $2.617 million of the Company's
convertible subordinated promissory notes converted that debt into unregistered
shares of the Company's common stock at a conversion price of $1.24 per share,
for a total of 2,110,322 shares of common stock. The notes converted contained
conversion rates ranging from $1.35 to $1.50 per share. The conversion resulted
in the Company recording a one time, non-cash beneficial conversion of debt to
equity interest expense of $241,000 during the quarter ended March 31, 2002. The
beneficial conversion of debt to equity interest expense had no impact on
shareholders' equity.

     The Company is highly leveraged and since its inception has financed its
working capital requirements for operations by issuing common stock and
subordinated debt and utilizing its bank line of credit. The August 2003
refinancing has significantly strengthened the Company's financial position,
enabling it to achieve a stronger balance sheet and improve cash flow resulting
from the two-year principal moratorium on principal payments under the August
2003 promissory notes. The Company believes that this transaction enhances its
business credibility with present and prospective customers, fuel suppliers,
trade creditors, other lenders and the investment community, and its ability to
compete in its business sector.

     The Company's material financial commitments, other than payroll, relate
primarily to maintaining its bank line of credit and making monthly payments of
principal and interest on equipment notes through August 2003; making
semi-annual interest payments on its August 2003 promissory notes beginning
December 31, 2003; and making semi-annual principal and interest payments for
the remaining three year term of the August 2003 promissory notes, with a
balloon payment of $3,000,000 due August 28, 2008.

     The Company's debt agreements contain covenants establishing certain
financial requirements and operating restrictions. The Company's failure to
comply with any covenant or material obligation contained in these debt
agreements, absent a waiver or forbearance from the lenders, would result in an
event of default which could accelerate debt repayment terms under the debt
agreements. Due to cross-default provisions contained in its debt agreements, an
event of default could accelerate repayment terms under the other agreements,
which would have a material adverse affect on the Company's liquidity and
capital resources.

     In December 2002, the Company and its principal equipment lender amended
the notes and security agreements between them to extend the maturity dates of
the equipment notes payable by three months. This revision modified the
repayment schedule by reducing principal payments for the period of December
2002 through April 2003 by $467,000. In May 2003, the Company and this lender
agreed to an additional extension of the maturity dates of the equipment notes
by two months and reduced its payments for the period from May 2003 through
August 2003 by $284,000. In August 2003 this lender was repaid in full in the
amount of $2,204,815 from the proceeds of the August 2003 refinancing. The
Company received a $757,000 cash discount from the lender in consideration of
the prepayment of the equipment debt.

     The Company has incurred net losses during most of its operating history
and has met its working capital and long-term debt service requirements by
raising both equity capital and subordinated debt and utilizing its bank line of
credit. For the years ended June 30, 2003, 2002 and 2001, the Company had net
losses of $1.6 million, $1.2 million, and $2.8 million, respectively. The
Company earned net income of $63,000 in the fourth quarter of its year ended
June 30, 2002, and $103,000 in the first quarter of its year ended June 30,
2003. The other quarterly results during this three-year period were net losses.

     The Company believes that cash flow from operations; the $2.9 million in
working capital from the August 2003 refinancing; and the two-year principal
payment moratorium on the August 2003 promissory notes should satisfy its
foreseeable liquidity requirements. However, it may seek additional sources of
financing if any cash flow deficiency were to arise in the future. There is no
assurance that additional financing would be available to the Company on
acceptable terms, or at all. If the Company does not comply with the covenants
in its debt agreements,

                                       15

<PAGE>

or if adequate funds are not available to finance operations or to pay debt
service obligations as they become due, the Company may be required to
significantly alter its operations.

     At June 30, 2003, the Company had cash and cash equivalents of $211,000 as
compared to $815,000 at June 30, 2002. The reduction was primarily due to cash
used in financing activities of $953,000. The Company had $101,000 available on
its bank line of credit as of June 30, 2003.

$10 MILLION THREE-YEAR CREDIT FACILITY

     On September 26, 2002, the Company entered into a three-year $10 million
credit facility with a national financial institution, replacing its prior
short-term $10 million credit facility. This bank line of credit permits the
Company to borrow up to 85% of the total amount of eligible accounts receivable.
Interest is payable monthly at 6% (1.75% over the prime rate of 4.25% at June
30, 2003), and outstanding borrowings under the line are secured by
substantially all Company assets other than its truck fleet and related
equipment. The maturity date of the bank line of credit is September 25, 2005,
with a prepayment fee to be charged if the Company terminates the credit
facility prior to such date. In addition, the credit facility may be extended by
the mutual consent of the Company and the bank after September 25, 2005.

     As of June 30, 2003 and June 30, 2002, the Company had outstanding
borrowings of $4.41 million and $4.68 million, respectively, under its bank
lines of credit. Based on eligible receivables outstanding, the Company had
$101,000 of cash availability on its bank line of credit at June 30, 2003. As of
June 30, 2003 and the date of this Form 10-K filing, the Company was in
compliance with the financial covenants required by the loan and security
agreement. As a result of the pay down of the bank line credit with proceeds
from the August 2003 refinancing, the Company has substantially increased its
availability under the bank line of credit.

     In August 2003, the Company and its bank line of credit lender amended the
loan and security agreement between them in connection with the Company's August
2003 refinancing which (1) released the lender's lien on patents, patent rights
and patent applications; (2) increased the unused line of credit fee by .50%;
(3) revised the effective book net worth covenant to include the August 2003
promissory notes in its calculation; (4) established a covenant to maintain a
minimum quarterly fixed charge coverage ratio as defined in the amended loan
agreement; (5) established a covenant for the Company to maintain a minimum
excess availability of $500,000; and (6) eliminated the loan prepayment fee. The
Company utilized a portion of the proceeds of the August 2003 refinancing to pay
down the bank line of credit by $2.9 million. The proceeds that were used to
pay down the outstanding line of credit balance are available to the Company for
working capital.

     Management believes that the Company's bank line of credit will provide the
working capital needed to maintain and grow its business and to accomplish its
business plan. However, if additional financing is required, there can be no
assurance that the Company will be able to obtain such financing from its
present bank line of credit or another lender at acceptable terms, or at all.
Further, since the Company's borrowings under its bank line of credit bear
interest at variable interest rates and represent a large portion of the
Company's outstanding debt, the Company's financial results could be materially
affected by significant increases or decreases in interest rates.

JANUARY 2002 CONVERSION OF SUBORDINATED DEBT

     In January 2002, certain holders of the convertible subordinated promissory
notes converted an aggregate of $2.617 million to unregistered shares of the
Company's common stock at a conversion price of $1.24 per share, for a total of
2,110,322 shares of common stock. The notes converted contained conversion rates
ranging from $1.35 to $1.50 per share. The holders of the remaining $283,600 of
convertible subordinated promissory notes issued by the Company who did not
convert their notes in January 2002 waived any conversion price adjustment. With
the consent of the holder, interest on two of these notes may be paid in the
Company's common stock, with the stock value based on the average closing price
of the stock during the most recent quarter. In September 2002, the maturity
dates of these non-converted notes were extended to August 31, 2004.

                                       16

<PAGE>

     The outstanding balance of these notes was repaid in full in September 2003
with proceeds from the August 2003 refinancing.

SUBORDINATED PROMISSORY NOTES

     On December 23, 2002, the Company issued a $150,000 short-term promissory
note to a shareholder. The note was due on January 31, 2003, with interest at 5%
over the prime interest rate. On January 21, 2003 the Company and the holder of
the note substituted the note for a $150,000 subordinated promissory note due on
January 31, 2005, bearing interest at an annual rate of 9%. With the consent of
the holder, interest on the note may be paid in unregistered shares of the
Company's common stock, with the stock value based on the closing bid price of
the stock for the five trading days before the last day of the quarter in which
the interest is due but in no event less than the closing bid price at the time
of issuance or the average of the closing bid prices for the five trading days
prior to such time, whichever is lower.

     On January 21, 2003, the Company issued $300,000 of subordinated promissory
notes to two shareholders. The notes are due on January 31, 2005 and bear
interest at an annual rate of 9%. With the consent of the holders, interest on
the notes may be paid in the Company's common stock, with the stock value based
on the closing bid price of the stock for the five trading days before the last
day of the quarter in which the interest is due but in no event less than the
closing bid price at the time of issuance or the average of the closing bid
prices for the five trading days prior to such time, whichever is lower.

     On May 12, 2003, the Company issued $300,000 of subordinated promissory
notes to certain shareholders. The notes bear interest at an annual rate of 14%
and are payable on demand. The Company repaid $235,500 of these notes with the
proceeds of the May 20, 2003 private placement issuance of subordinated
promissory notes and common stock purchase warrants. The exercise price of the
warrants is $0.86 per share.

     On May 20, 2003, the Company issued $235,500 of subordinated promissory
notes to officers, directors and certain shareholders. The notes are due on
November 19, 2003 and bear interest at an annual rate of 14%. With the consent
of the holders, the Company may elect to pay interest on the notes in shares of
the Company's common stock, with the stock value based on the most recent
closing bid price of the stock at the time the notes were executed or for the
five trading days before such date, whichever is lower. The Company also issued
warrants to purchase 82,425 shares of common stock exercisable at $0.86 per
share in connection with the notes. The warrants issued are exercisable for a
period of three (3) years from and after the date on which the notes are repaid
or otherwise surrendered to the Company, but in no event later than November 19,
2006.

     The outstanding balance of these notes was repaid in full in September 2003
with proceeds from the August 2003 refinancing.

AUGUST 2003 PROMISSORY NOTES

     On August 29, 2003 the Company closed a $6.925 million offering to
institutions and other accredited lenders consisting of five-year 10% promissory
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 August 2003 promissory notes are
collateralized by a first priority security interest in its specialized fueling
truck fleet and related equipment and by patents in its proprietary fuel
management system. The August 2003 promissory notes provide (1) for no principal
payments until August 28, 2005; (2) six $750,000 semi-annual principal payments
commencing on August 28, 2005 through February 28, 2008; (3) a balloon payment
of $3,000,000 at maturity on August 28, 2008; (4) require semi-annual interest
payments on June 30 and December 31 commencing December 31, 2003; and (5) are
callable after August 1, 2005 at 105% of par. The net cash proceeds from the
financing were $2.9 million, after payment of related fees and expenses and
repayment of all outstanding equipment and subordinated debt. In connection with
the issuance of the August 2003

                                       17

<PAGE>

promissory notes, the Company negotiated a settlement with its primary equipment
lender and received a $757,000 cash discount by prepaying the outstanding
balance on August 29, 2003.

OPERATIONS

     Since the Company's current management team assumed operating control in
February 2001, and through the filing of the Company's 10-K, the Company has
undergone a top to bottom transformation. During this period, $14.2 in capital
has been raised, $8.2 million repaid to equipment lenders, and $1.0 million
repaid to holders of subordinated debt, with the Company currently having over
$2.9 million available on its bank line of credit. While the volume of delivered
business grew by only 12% from February 2001 through June 30, 2003, a
significant volume of non-profitable gallons being delivered has been
renegotiated or replaced with positive margin contributing business. Net margins
have improved by 143% per gallon and 172% in dollars from February 2001 through
June 30, 2003. These improvements stem from a reduction in direct operating
expenses over that period of 29% per gallon and 20% in dollars while at the same
time insurance costs have doubled due to noncontrollable economic factors.

     From February 2001 through June 30, 2003, The Company's delivery efficiency
has improved by 52% for gallons delivered per driver payroll hour and 30% for
gallons delivered per truck. As of June 30, 2003, the Company was delivering 12%
more gallons than in February 2001 while reducing the number of trucks utilized
in the delivery process to 70 from 90 during that time. The Company has 30
trucks available for its current expansion program, and believes it has the
capacity in its overall truck fleet to meet its foreseeable requirements for
business growth without acquiring additional equipment. During this period the
total number of Company employees was reduced by 27%, from 203 to 148, while
management and supervisory personnel was reduced by 38%, from 26 to 16.

     The Company's mobile fueling business requires it to utilize considerable
working capital for fuel, labor and equipment costs prior to receiving payments
from customers. The fuel purchased by the Company for resale to customers
generally must be paid for within 10 to 15 days of purchase, with labor costs
and related taxes paid bi-weekly, and equipment related costs generally paid
within 30 days. The Company invoices customers both daily and weekly and
generally collects the majority of its accounts within 30 to 45 days.

     The Company believes that it will add incremental business from new and
existing customers at acceptable margins; continue to control and reduce
operating costs; improve equipment utilization; and generate additional cash
flow to support its working capital credit facility and carrying cost of the
August 2003 promissory notes. However, there is no assurance that the Company
will be able to improve its operating performance in the future; generate
sufficient cash flow; or raise additional capital to fund any working capital or
debt service shortfalls during possible future business downturns, whether the
downturn is caused by depressed economic conditions, or the Company's inability
to execute its business plan.

     A series of five unanticipated events adversely impacted the Company's
financial performance in the last three quarters of the 2003 fiscal year. As a
result, the average net margin per gallon of fuel delivered was reduced from
$.14 in September 2002 to $.11 in June 2003; the growth in net new business was
restricted; and the Company's reported loss for the year ended June 30, 2003 was
materially increased:

     (1)  CONVERSION TO AUTOMATED DAILY BILLING SYSTEM
          The Company's second quarter loss of $858,000 resulted in part from
          problems associated with an automated daily billing system project.
          The additional costs incurred and lost revenue accounted for $203,000
          of the loss. These problems were finally resolved in December of 2002
          and the Company now maintains an average 27 to 30 days sales
          outstanding, the lowest in its history.

     (2)  INCREASE IN INSURANCE PREMIUMS
          The Company's annual insurance premiums increased in October 2002 by
          $360,000 and $270,000 for the year ended June 30, 2003. The October
          2002 increase follows a substantial increase in premiums in October
          2001. The Company believes that these increases were directly related
          to the events of September 11, 2001. It is anticipated by management
          that property liability and workers' compensation coverage renewals in
          October 2003 will result in relatively flat premiums as the

                                       18

<PAGE>

          insurance industry has stabilized in the calming period following the
          2001 terrorist attack and the Company has significantly improved its
          claims performance since the current management assumed control of
          operations in February 2001.

     (3)  INCREASED PETROLEUM PRODUCT PRICES
          From February 2002 to February 2003 the average price of diesel fuel
          in the Company's markets increased over 120%, from $0.51 to $1.14 per
          gallon, primarily due to military events in the Middle East, refinery
          shutdowns in Venezuela and a severe winter in the U. S. Northeast.
          This extraordinary price escalation adversely affected the addition of
          new business opportunities from the fall of 2002 until late spring of
          2003 when prices stabilized and a more customary decision making
          process regarding mobile fueling services was restored.

     (4)  COMPETITION
          The Company believes that, in the last calendar quarter of 2002 and
          through the first half of calendar year 2003, its largest competitor,
          a privately held mobile fueling company, undertook a strategy of
          seeking to drive competition out of business and increase market share
          through an extremely aggressive pricing scheme. While this pricing
          strategy was ultimately unsuccessful and the Company believes that it
          contributed to the competitor ceasing operations in July 2003, it did
          force the Company to lower prices to many of its customers and
          adversely impacted the profitability of the Company's business and the
          development of new business during the year ended June 30, 2003.

     (5)  LEGAL AND PROFESSIONAL FEES
          During the fiscal year ending June 30, 2003, the Company incurred
          $200,000 of higher legal and professional fees. These higher costs
          partly related to the new SEC mandates and legislative regulatory
          initiatives under the Sarbanes-Oxley Act of 2002.

     During the year ended June 30, 2003 management continued to implement
operational changes which have required time and capital resources; have enabled
the Company to compete more effectively for mobile fueling business; and have
provided the Company a more stable platform to implement its business plan.
These initiatives have included:

     o    Reducing field operating expenses, primarily direct labor and
          maintenance costs, and enhancing the effectiveness of environmental
          and safety programs

     o    Changing delivery routes and schedules to increase efficiencies,
          decrease costs, and improve the quality of customer service and
          reliability of fuel deliveries

     o    Decreasing administrative and field overhead costs, primarily
          personnel and information system expenses

     o    Reevaluating margin contribution on all accounts, increasing service
          charges on low margin accounts and discontinuing service on
          unprofitable accounts

     o    Expanding marketing and sales efforts in selected locations with
          experienced sales personnel having specific volume and margin
          objectives

     o    Upgrading field personnel hiring and training procedures to improve
          employee retention and labor efficiency

     o    Improving the patented electronic fuel dispensing and field
          information gathering system to reduce labor costs, enhance reporting
          accuracy, eliminate manual manipulation of fueling data and integrate
          multiple safety features

                                       19

<PAGE>

     o    Redesigning field and supervision procedures to increase gallons of
          fuel delivered per day, per payroll hour and per truck

     o    Revamping credit and collections policies and procedures to reduce
          days sales outstanding and decrease uncollectible accounts

     o    Establishing improved financial, accounting and operating internal
          control systems and procedures over important Company processes in
          order to more effectively manage business risks, safeguard assets and
          comply with new legislative and regulatory requirements.

NEW ACCOUNTING STANDARDS

     In November 2002, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN
45"). FIN 45 requires the recognition of a liability for certain guarantee
obligations issued or modified after December 31, 2002. FIN 45 also clarifies
disclosure requirements to be made by a guarantor for certain guarantees. The
disclosure provisions of FIN 45 were effective for fiscal years ending after
December 15, 2002. The Company adopted the disclosure provisions of FIN 45 as of
June 30, 2003 and the adoption the accounting requirements effective July 1,
2003. The adoption of FIN 45 did not have a significant impact on the Company's
consolidated financial position, results of operations or cash flows.

     In January 2003, the FASB issued FASB Interpretation No. 46 "Consolidation
of Variable Interest Entities, an Interpretation of APB No. 50," ("FIN 46"). FIN
46 requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. The Company did not create or acquire any
variable interest entities between January 31, 2003 and June 30, 2003.
Similarly, the Company does not have any variable interest entities created or
acquired prior to February 1, 2003 that would have a significant impact on the
Company's consolidated financial position, results of operations or cash flows
upon adoption of the remaining provisions of FIN 46 for the quarter ended
September 30, 2003.

     In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS 149 clarifies under what
circumstances a contract with an initial net investment meets the
characteristics of a derivative and clarifies when a derivative contains a
financing component that warrants special reporting in the statement of cash
flows. SFAS 149 amends certain other existing pronouncements. SFAS 149 is
generally effective for contracts entered into or modified after June 30, 2003
and should be applied prospectively. The adoption of SFAS 149 is not expected to
have a significant impact on the Company's consolidated financial position,
results of operations or cash flows.

     In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003. This statement establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities
and equity. It requires that an issuer classify a freestanding financial
instrument that is within its scope as a liability (or an asset in some
circumstances). The Company did not issue any financial instruments between May
31, 2003 and June 30, 2003 and does not expect SFAS 150 to have a significant
impact on the Company's consolidated financial position, results of operations
or cash flows.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The Company has identified the policies outlined below as critical to its
business operations and an understanding of the results of operations. The
listing is not intended to be a comprehensive list of all accounting

                                       20

<PAGE>

policies. In many cases, the accounting treatment of a particular transaction is
specifically dictated by accounting principles generally accepted in the United
States, with no need for management's judgment in their application. The impact
and any associated risks related to these policies on business operations are
discussed throughout Management's Discussion and Analysis of Financial Condition
and Results of Operations where such policies affect reported and expected
financial results. For a detailed discussion on the application of these and
other accounting policies, see Note 2 in the Notes to the Consolidated Financial
Statements in Item 8 on Form 10-K. Note that the preparation of this Form 10-K
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenue and expenses during the reporting period. There can be no assurance that
actual results will not differ from those estimates.

Accounts Receivable and Allowance for Doubtful Accounts

     The Company performs ongoing credit evaluations of its customers and
adjusts credit limits based upon payment history and the customers' current
credit worthiness, as determined by a review of their current credit
information. Management continuously monitors collections and payments from
customers and maintains a provision for estimated credit losses based upon
historical experience and any specific customer collection issues that are
identified. While such credit losses have historically been within expectations
and the provisions established, the Company cannot guarantee that it will
continue to experience the same credit loss rates that have occurred in the
past. The Company's accounts receivable as of June 30, 2003 were approximately
$6.1 million, net of an allowance for doubtful accounts of approximately
$530,000.

Property and Equipment

     The Company records property and equipment at cost and depreciates that
cost over the estimated useful life of the asset on a straight-line basis.
Ordinary maintenance and repairs are expensed as incurred and improvements that
significantly increase the value or useful life of property and equipment are
capitalized.

     The Company tests property and equipment for impairment whenever events or
changes in circumstances indicate that the carrying value of an asset may not be
recoverable. The conditions that would trigger an impairment assessment of
property, plant and equipment would include, but not be limited to, a
significant, sustained negative trend in operating results or cash flows; a
decrease in demand for the Company's services; a change in the competitive
environment; and other industry and economic factors. Recoverability of assets
to be held and used is measured by a comparison of the carrying amount of the
asset to future net cash flows expected to be generated by the asset. If such
assets are deemed to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets based on the projected net cash flows discounted at a rate
commensurate with the risk of the assets.

Income Taxes

     In connection with the preparation of the Company's financial statements,
income taxes are required to be estimated. This process involves estimating
actual current tax exposure together with assessing temporary differences
resulting from differing treatment of items for tax and accounting purposes.
These differences result in deferred tax assets and liabilities, which are
included on the balance sheet. The likelihood that deferred tax assets will be
recovered from future taxable income is assessed and to the extent that recovery
is not likely, a valuation allowance is established. To the extent a valuation
allowance is established or an increase in the allowance is recorded in a
period, a tax is provided in the statement of operations. Management judgment is
required in determining the provision for income taxes, the deferred tax assets
and liabilities and any valuation allowance recorded against net deferred tax
assets. A valuation allowance of approximately $2.9 million was recorded as of
June 30, 2003, due to uncertainties related to utilizing some of the deferred
tax assets, primarily consisting of certain net operating losses carried
forward, before they expire. The valuation allowance is based on estimates of
taxable income and the period over which deferred tax assets will be
recoverable. In the event that actual results differ from these estimates, or
these estimates are adjusted in future periods, it may be necessary to establish
an additional valuation allowance

                                       21

<PAGE>

which could materially impact the Company's financial position and results of
operations. The net deferred tax asset as of June 30, 2003 was zero, net of the
valuation allowance.

COMPARISON OF YEAR ENDED JUNE 30, 2003 TO YEAR ENDED JUNE 30, 2002

REVENUES

     Revenue increased $11.3 million, or 18.6%, in the year ended June 30, 2003
compared to the year ended June 30, 2002. The increase in revenue resulted from
extraordinary increases in the wholesale price of diesel fuel and gasoline,
offset by a decline in gallons delivered. The Company delivered 47.3 million
gallons of fuel to its customers in the year ended June 30, 2003, a decrease of
4.4% compared to the 49.5 million gallons delivered in the year ended June 30,
2002. The decrease in gallons was due to reduced demand by certain customers
arising from depressed economic conditions throughout the year; modifications of
certain customers' mobile fueling programs in response to substantially
increased fuel prices; termination of unprofitable mobile fueling service
accounts; and elimination of bulk delivery services in northern California. The
discontinued bulk delivery service in northern California accounted for 5.6
million gallons of the total 49.5 million gallons delivered in the prior fiscal
year ending June 30, 2002. Notwithstanding the aforementioned, the Company
delivered 3.4 million or 7.7% more mobile fueling gallons than the prior fiscal
year.

GROSS PROFIT

     Gross profit decreased approximately $568,000, or 12.4%, in the year ended
June 30, 2003 compared to the year ended June 30, 2002. The average net margin
per delivered gallon of fuel in the year ended June 30, 2003 decreased to 11.5
cents compared to 12.2 cents in the year ended June 30, 2002. The decrease in
gross profit was due to increases in the cost of fuel used to operate the
Company's delivery fleet of $99,000; higher fixed costs associated with an
increase in property and liability insurance of $214,000; and decreases in other
service charges revenue of $82,000. The remaining decrease is attributable to
the Company's largest competitor driving down service margins during the current
year, which resulted in the Company lowering prices it charges to some of its
customers.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased approximately
$334,000, or 7.6%, in the year ended June 30, 2003 compared to the year ended
June 30, 2002. The increase in these expenses primarily resulted from an
increase in professional fees of $169,000; an increase in insurance expense of
$193,000; an increase in sales and marketing costs of $37,000; an increase in
temporary labor expense of $60,000; and an increase in depreciation expense of
$57,000; offset by a decrease in provision for bad debts of $161,000.

INTEREST EXPENSE

     Interest expense decreased approximately $260,000, or 22.1%, in the year
ended June 30, 2003 compared to the year ended June 30, 2002 as a result of
lower interest rates on variable rate debt and decreased borrowings resulting
from the scheduled repayment of existing equipment debt; reduced bank line of
credit advances; and conversion of subordinated debt to equity.

     The Company incurred in January 2002 in connection with the conversion of
its convertible subordinated promissory notes to equity, a one-time non-cash
charge related to EITF 98-5, "Accounting for Convertible Securities with
Beneficial Conversion Features". This charge was $241,000 and recorded as a
beneficial conversion of debt to equity interest expense in the year ended June
30, 2002.

INCOME TAXES

     The Company recorded no income tax expense for the years ended June 30,
2003 or 2002. The Company has net operating loss carryforwards of $13.0 million
at June 30, 2003.

                                       22

<PAGE>

EBITDA

     Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
was $737,000 for the year ended June 30, 2003, a decrease of $975,000 from
$1,712,000 for the year ended June 30, 2002. The decrease was primarily due to
the higher net loss during fiscal year ended June 30, 2003, offset by reduced
interest expense in the current year. The components of EBITDA for the years
ended June 30, 2003 and 2002 are as follows:

                                                    2003          2002
                                                -----------    ----------

            Net loss                           $ (1,581,000)  $(1,162,000)
            Add back:
              Interest expense                      915,000     1,175,000
              Beneficial conversion of debt
                to equity interest expense               --       241,000
              Depreciation and amortization
                expense                           1,403,000     1,458,000
                                                -----------    ----------
            EBITDA                             $    737,000   $ 1,712,000
                                                ===========    ==========


COMPARISON OF YEAR ENDED JUNE 30, 2002 TO YEAR ENDED JUNE 30, 2001

REVENUES

     Revenue decreased $18.6 million, or 23.4%, for the year ended June 30, 2002
compared to the year ended June 30, 2001. The decrease in revenue resulted from
a substantial decrease in the wholesale price of diesel fuel and gasoline as
well as a decline in gallons delivered. The Company delivered 49.5 million
gallons of fuel to its customers in the year ended June 30, 2002, a decrease of
8.5% compared to the 54.1 million gallons delivered in the year ended June 30,
2001. The decrease in gallons delivered resulted primarily from the elimination
of non-profitable markets and accounts, as well as volume declines of certain
customers whose levels of business activity have been adversely impacted by the
current economic downturn.

GROSS PROFIT

     Gross profit increased approximately $2.1 million, or 82.2%, in the year
ended June 30, 2002 compared to the year ended June 30, 2001. The average net
margin per delivered gallon of fuel in the year ended June 30, 2002 improved to
12.2 cents compared to 7.3 cents in the year ended June 30, 2001. The increase
in gross profit was due to the results of the business initiatives started
February 2001, yielding reduced direct operating expenses, improved margins on
existing accounts and new, higher-margin accounts.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased approximately
$589,000, or 15.5%, in the year ended June 30, 2002 compared to the year ended
June 30, 2001. The increase in these expenses primarily resulted from increases
in payroll costs associated with the reestablishment of a marketing and sales
department and program (including direct marketing) which had been previously
eliminated, together with the restructuring of the management, operations, and
information technology departments and related personnel; increases in insurance
expense and legal fees; and an increase in the allowance for doubtful accounts.

INTEREST EXPENSE

     Interest expense decreased approximately $396,000, or 25.2%, in the year
ended June 30, 2002 compared to the year ended June 30, 2001 as a result of
lower interest rates on variable rate debt and decreased borrowings, primarily
due to repayment of existing equipment debt, credit facility and the conversion
of the subordinated promissory notes to equity.

                                       23

<PAGE>

     The Company incurred, in connection with the conversion of its convertible
subordinated promissory notes to equity in January 2002, a one-time non-cash
charge related to EITF 98-5, "Accounting for Convertible Securities with
Beneficial Conversion Features". This charge was $241,000 and classified as
beneficial conversion of debt to equity interest expense for the year ended June
30, 2002.

INCOME TAXES

     The Company recorded no income tax expense for the years ended June 30,
2002 or 2001. The Company has net operating loss carryforwards of $12.2 million
at June 30, 2002.

EBITDA

     EBITDA increased by $1.5 million to $1.7 million for the year ended June
30, 2002 from $223,000 for the year ended June 30, 2001. The increase was
primarily due to higher net margins and operating profit. The components of
EBITDA for the years ended June 30, 2002 and 2001 are as follows:

                                                     2002        2001
                                                 ----------   -----------
                                                              (unaudited)

            Net loss                            $(1,162,000)  $(2,774,000)
            Add back:
              Interest expense                    1,175,000     1,571,000
              Beneficial conversion of debt
                to equity interest expense          241,000            --
              Depreciation and amortization
                expense                           1,458,000     1,426,000
                                                 ----------    ----------
            EBITDA                              $ 1,712,000   $   223,000
                                                 ==========    ==========


COMPARISON OF FIVE-MONTH TRANSITION PERIOD ENDED JUNE 30, 2001 TO FIVE MONTHS
ENDED JUNE 30, 2000

REVENUES

     Revenue decreased $7.0 million, or 19.1%, for the five months ended June
30, 2001 compared to the five months ended June 30, 2000. The decrease in
revenue resulted from a decrease in the wholesale price of diesel fuel and
gasoline, declines in the actual quantities of fuel delivered and, to a lesser
extent, declines in the average delivery service fee as a result of changes in
the mix of business. The Company delivered 21.8 million gallons of fuel to its
customers in the five months ended June 30, 2001, a decrease of 13.9% compared
to the 25.3 million gallons delivered in the five months ended June 30, 2000.
The Company sells fuel at prices based upon the daily market averages in each
operating location and provides delivery services at a fixed price per gallon.
Revenue levels can vary depending on the upward or downward movement of fuel
prices in each market. The Company has begun the reestablishment of its
marketing and sales function in order to increase the volume of mobile and bulk
fueling business for future periods.

GROSS PROFIT

     Gross profit decreased $597,000, or 44.7%, in the five months ended June
30, 2001 compared to the five months ended June 30, 2000. The net margin per
gallon of fuel in the five months ended June 30, 2001 was 6.2 cents compared to
7.4 cents in the five months ended June 30, 2000. Several factors contributed to
the decrease in gross profit and net margin per gallon, including decreases in
volume; reduced historical inventory gains from gross volumes sold to net
volumes purchased; increases in inventory shrink arising from inefficiencies in
field control and reporting systems; increased product procurement costs;
increased vehicle expenses, primarily depreciation, running fuel and insurance;
and decreases in the average delivery service fee resulting from the loss of
higher margin mobile fueling business and the replacement of a portion of that
business with lower margin bulk delivery business.

                                       24

<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses increased $917,000, or 75.9%,
in the five months ended June 30, 2001 compared to the five months ended June
30, 2000. The increase in these expenses primarily resulted from increases in
payroll costs associated with a restructuring of the marketing, information
technology and management functions; increases in direct marketing and sales
payroll; and increases in insurance expense, legal fees and other employee
benefits.

INTEREST EXPENSE

     Interest expense decreased $75,000, or 11.2%, in the five months ended June
30, 2001 compared to the five months ended June 30, 2000 as a result of
decreased borrowings, primarily due to repayment of existing equipment debt.

INCOME TAXES

     The Company recorded no income tax expense in the five-month periods ended
June 30, 2001 or 2000. The Company has net operating loss carryforwards of $11.0
million at June 30, 2001.

EBITDA

     EBITDA decreased by $1,436,000 to a negative $748,000 for the five-month
transition period ended June 30, 2001 from $688,000 for the five-month
transition period ended June 30, 2000. The decrease was primarily due to the
decreases in gross profit as well as the increases in selling, general and
administrative expenses. The components of EBITDA for the five-month transition
periods ended June 30, 2001 and 2000 are as follows;

                                                2001        2000
                                            -----------  ----------
                                                         (unaudited)

            Net loss                        $(1,951,000) $ (512,000)
            Add back:
              Interest expense                  590,000     665,000
              Depreciation and amortization     613,000     535,000
                expense
                                             ----------   ---------
            EBITDA                          $  (748,000) $  688,000
                                             ==========   =========


COMPARISON OF FISCAL YEAR ENDED JANUARY 31, 2001 TO FISCAL YEAR ENDED JANUARY
31, 2000

REVENUES

     Revenue increased $12.3 million, or 16.6%, for the year ended January 31,
2001 ("fiscal 2001") compared to the year ended January 31, 2000 ("fiscal
2000"). The increase in revenue resulted from an overall increase in the
wholesale price of diesel fuel and gasoline, offset by declines in the actual
quantity of fuel delivered and, to a lesser extent, declines in the average
delivery service fee as a result of changes in the mix of business. The Company
delivered 57.6 million gallons of fuel to its customers in fiscal 2001, a
decrease of 3.0% over the 59.4 million gallons delivered in fiscal 2000. The
Company sells fuel at prices based upon the daily market averages in each
operating location and provides delivery services at a fixed price per gallon.
Revenue levels can vary depending on the upward or downward movement of fuel
prices in each market.

GROSS PROFIT

     Gross profit decreased $1.5 million, or 33.2%, in fiscal 2001 compared to
fiscal 2000. The net margin per gallon of fuel in fiscal 2001 was 7.7 cents
compared to 9.6 cents in fiscal 2000. A number of factors contributed to

                                       25

<PAGE>

the decrease in gross profit, including decreases in volume, reduced historical
inventory gains from gross volumes sold to net volumes purchased, increases in
inventory shortages arising from inefficiencies in field control and reporting
systems, increased product procurement costs, increased vehicle expenses,
primarily depreciation, running fuel and insurance, and decreases in the average
delivery service fee resulting from the loss of higher margin mobile fueling
business and the replacement of a portion of that business with lower margin
bulk delivery business.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Selling, general and administrative expenses decreased $218,000, or 7.1%,
in fiscal 2001 compared to fiscal 2000. The decrease in these expenses primarily
resulted from eliminating marketing and sales personnel in the first quarter of
the year, including related travel and entertainment expenses and reduced
financial/public relations expenses, offset by increases in corporate payroll
costs in the last quarter of the year.

INTEREST EXPENSE

     Interest expense increased $493,000, or 42.8%, in fiscal 2001 compared to
fiscal 2000 as a result of increased borrowings, primarily in prior years, to
pay for new custom fuel trucks for the Company's operations and as a result of
interest rate increases throughout fiscal 2001.

INCOME TAXES

     The Company recorded no income tax expense in fiscal 2001 or 2000. The
Company has net operating loss carryforwards of $8.0 million at January 31,
2001.

EBITDA

     EBITDA decreased by $1,050,000 to $1,659,000 for the year ended January 31,
2001 from $2,709,000 for the year ended January 31, 2000. The decrease was
primarily due to the decreases in gross profit, increases in interest expense
due to increased borrowings, and was offset by the decrease in selling, general
and administrative expenses. The components of EBITDA for the years ended
January 31, 2001 and 2000 are as follows:

                                                2001            2000
                                             ----------      ----------

            Net (loss) income               $(1,335,000)    $   472,000
            Add back:
              Interest expense                1,645,000       1,152,000
              Depreciation and
                amortization expense          1,349,000       1,085,000
                                             ----------      ----------
            EBITDA                          $ 1,659,000     $ 2,709,000
                                             ==========      ==========


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's exposure to market risk is limited primarily to the
fluctuating interest rates associated with variable rate debt outstanding to
finance working requirements. This debt bears interest at the United States
prime interest rate plus a fixed markup and is subject to change based upon
interest rate changes in the United States. The Company does not currently use,
and has not historically used, derivative instruments to hedge against such
market interest rate risk. Increases or decreases in market interest rates could
have a material impact on the financial condition, results of operations and
cash flows of the Company.

                                       26

<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements of the Company required by Form 10-K are attached
following Part III of this report, commencing on page F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.

                                       27

<PAGE>

                                      PART III


ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     The information required by this item is incorporated by reference from the
Company's Definitive Proxy Statement in connection with its 2003 Annual Meeting
of Shareholders to be filed with the Commission pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by this report.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item is incorporated by reference from the
Company's Definitive Proxy Statement in connection with its 2003 Annual Meeting
of Shareholders to be filed with the Commission pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by this report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is incorporated by reference from the
Company's Definitive Proxy Statement in connection with its 2003 Annual Meeting
of Shareholders to be filed with the Commission pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by this report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is incorporated by reference from the
Company's Definitive Proxy Statement in connection with its 2003 Annual Meeting
of Shareholders to be filed with the Commission pursuant to Regulation 14A not
later than 120 days after the end of the fiscal year covered by this report.

ITEM 14. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

     Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and participation of the Company's
Chief Executive Officer and Chief Financial Officer (the "Officers") of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Securities Exchange Act Rule 13a-14. Based upon that
evaluation, the Officers concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company required to be included in the Company's periodic SEC
filings, including this report.

INTERNAL CONTROLS

     There were no significant changes made in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.

                                       28

<PAGE>

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

        (A)   EXHIBITS

     Exhibits     Description
     --------     -----------

          3.1  Restated Articles of Incorporation (16)

          3.2  Amended and Restated Bylaws (6)

          4.1  Form of Common Stock Certificate (1)

          4.2  Form of Redeemable Common Stock Purchase Warrant (1)

          4.3  Underwriters' Purchase Option Agreement between the Registrant
               and Argent Securities, Inc. (1)

          4.4  Warrant Agreement between the Registrant and American Stock
               Transfer & Trust Company (1)

          10.1 Employment Agreement, dated November 1, 2000 between the
               Registrant and Stanley H. Streicher (2)(6)

          10.2 Registrant's 1996 Stock Option Plan (1)(2)

          10.3 $10,000,000 Amended and Restated Loan Agreement, dated May 25,
               1999, between the Registrant and Bank Atlantic and First
               Amendment, dated December 22, 1999, to Amended and Restated Loan
               Agreement (5)

          10.4 Amended and Restated $10,000,000 Promissory Note, dated May 9,
               2001, between the Registrant and Bank Atlantic (7)

          10.5 Registrant's 2000 Stock Option Plan (2)(8)

          10.6 Employment Agreement, dated October 26, 2000 between the
               Registrant and Richard E. Gathright (2)(9)

          10.7 Second Amendment, dated May 9, 2001, to Amended and Restated Loan
               Agreement, dated May 25, 1999 (10)

          10.8 Promissory Note, dated July 7, 2000, between the Registrant and
               C. Rodney O'Connor (11)

          10.9 Form of Convertible Subordinated Promissory Note (12)

         10.10 Streicher Mobile Fueling, Inc. 2001 Directors Stock Option Plan
               (13)

         10.11 Agreement dated April 1, 2002 between Stanley H. Streicher,
               individually, and Supreme Oil Company Inc. ("Supreme"), a company
               wholly owned by Mr. Streicher and the Company with respect to the
               repayment by Supreme of certain debts owned to the Company by
               Supreme (14)

         10.12 Loan and Security Agreement with Congress Financial Corporation
               dated September 26, 2002 (15)

         10.13 First Amendment to Loan and Security Agreement with Congress
               Financial Corporation dated March 31, 2003 (16)

                                       29

<PAGE>

         10.14 Indenture with The Bank of Cherry Creek dated August 29, 2003
               (16)

         10.15 Security Agreement with The Bank of Cherry Creek dated August
               29, 2003 (16)

          23.1 Consent of KPMG LLP (16)

          31.1 Certificate of Chief Executive Officer pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002 (16)

          31.2 Certificate of Chief Financial Officer pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002 (16)

          32.1 Certificate of Chief Executive Officer and Chief Financial
               Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002
               (16)

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

(1)  Incorporated by reference to the exhibit of the same number filed with the
     Company's Registration Statement on Form SB-2 (No. 333-11541)

(2)  Management Contract or Compensatory Plan

(3)  Incorporated by reference to the exhibit of the same number filed by the
     Company with Form 10-K for the fiscal year ended January 31, 1998.

(4)  Incorporated by reference to the exhibit of the same number filed by the
     Company with Form 10-K for the fiscal year ended January 31, 1999.

(5)  Incorporated by reference to the exhibit of the same number filed by the
     Company with Form 10-K for the fiscal year ended January 31, 2000.

(6)  Incorporated by reference to the exhibit of the same number filed by the
     Company with Form 10-K for the fiscal year ended January 31, 2001.

(7)  Incorporated by reference to Exhibit 10.5 filed by the Company with Form
     10-K for the fiscal year ended January 31, 2001.

(8)  Incorporated by reference to Exhibit 10.6 filed by the Company with Form
     10-K for the fiscal year ended January 31, 2001.

(9)  Incorporated by reference to Exhibit 10.7 filed by the Company with Form
     10-K for the fiscal year ended January 31, 2001.

(10) Incorporated by reference to Exhibit 10.8 filed by the Company with Form
     10-K for the fiscal year ended January 31, 2001.

(11) Incorporated by reference to Exhibit 10.9 filed by the Company with Form
     10-K for the fiscal year ended January 31, 2001.

(12) Incorporated by reference to Exhibit 10.10 filed by the Company with Form
     10-K for the fiscal year ended January 31, 2001.

(13) Incorporated by reference to Exhibit A of the Proxy Statement filed by the
     Company for the Annual Meeting of Shareholders held on July 19, 2001

(14) Incorporated by reference to Exhibit 99.1 of the Form 8-K dated June 12,
     2002 filed by the Company

(15) Incorporated by reference to Exhibit 99.1 of the Form 8-K dated September
     30, 2002 filed by the Company

(16) Filed herewith.

                                       30

<PAGE>

(b)  FINANCIAL STATEMENT SCHEDULE

(c)  REPORTS ON FORM 8-K

     The Company filed a Form 8-K dated May 15, 2003, under Item 12, reporting
     the issuance of a press release covering the operating results for the
     third quarter ending March 31, 2003.

                                       31

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


Dated:  October 3, 2003                  STREICHER MOBILE FUELING, INC.


                                         By: /S/ RICHARD E. GATHRIGHT
                                            -----------------------------------
                                            Richard E. Gathright, Chief
                                            Executive Officer and President

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

              Name                          Title                    Date
              ----                          -----                    ----

By:/S/ RICHARD E. GATHRIGHT      Chairman of the Board,        October 3, 2003
   --------------------------    Chief Executive Officer and
   Richard E. Gathright          President (Principal
                                 Executive Officer)


By:/S/ MICHAEL S. SHORE          Senior Vice President -       October 3, 2003
   --------------------------    Chief Financial Officer
   Michael S. Shore              (Principal Financial and
                                 Accounting Officer)


By:/S/ WENDELL R. BEARD          Director                      October 3, 2003
   --------------------------
   Wendell R. Beard


By:/S/ LARRY S. MULKEY           Director                      October 3, 2003
   --------------------------
   Larry S. Mulkey


By:/S/ C. RODNEY O'CONNOR        Director                      October 3, 2003
   --------------------------
   C. Rodney O'Connor


By:/S/ ROBERT S. PICOW           Director                      October 3, 2003
   --------------------------
   Robert S. Picow


By:/S/ W. GREG RYBERG            Director                      October 3, 2003
   --------------------------
   W. Greg Ryberg

                                       32

<PAGE>

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                      PAGE

Report of Independent Certified Public Accountants.............        F-2

Consolidated Balance Sheets as of June 30, 2003 and 2002.......        F-3

Consolidated Statements of Operations for the Years
   Ended June 30, 2003 and 2002, the Five-Month
   Transition Period Ended June 30, 2001 and the Year
   Ended January 31, 2001......................................        F-4

Consolidated Statements of Shareholders' Equity for the
   Years Ended June 30, 2003 and 2002, the Five-Month
   Transition Period Ended June 30, 2001 and the Year
   Ended January 31, 2001......................................        F-5

Consolidated Statements of Cash Flows for the Years
   Ended June 30, 2003 and 2002, the Five-Month
   Transition Period Ended June 30, 2001 and the Year
   Ended January 31, 2001......................................        F-6

Notes to Consolidated Financial Statements.....................        F-8

                                       F-1

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

                          Independent Auditors' Report

The Board of Directors and Shareholders
Streicher Mobile Fueling, Inc.:

We have audited the accompanying consolidated balance sheets of Streicher Mobile
Fueling, Inc. and subsidiaries as of June 30, 2003 and 2002, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
the years ended June 30, 2003 and 2002, the five-month transition period ended
June 30, 2001, and the year ended January 31, 2001. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Streicher Mobile
Fueling, Inc. and subsidiaries as of June 30, 2003 and 2002, and the results of
their operations and their cash flows for the years ended June 30, 2003 and
2002, the five-month transition period ended June 30, 2001, and the year ended
January 31, 2001, in conformity with accounting principles generally accepted in
the United States of America.

KPMG LLP

Fort Lauderdale, Florida
September 30, 2003

                                       F-2

<PAGE>

<TABLE>
<CAPTION>
                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                             JUNE 30, 2003 AND 2002

                  (in 000's, except share and per share data)

               ASSETS                                       June 30, 2003     June 30, 2002
----------------------------------------------------------  -------------     -------------
<S>                                                         <C>               <C>
Current assets:
  Cash and cash equivalents ............................    $         211     $         815
  Restricted cash ......................................               78               245
  Accounts receivable, net .............................            6,113             6,382
  Inventories ..........................................              168               363
  Prepaid expenses and other current assets ............              387               460
                                                            --------------    --------------
       Total current assets ............................            6,957             8,265

Property and equipment, net ............................            8,741            10,012
Note receivable from related party .....................               52               200
Other assets ...........................................              261                83
                                                            --------------    --------------
        Total assets ...................................    $      16,011     $      18,560
                                                            ==============    ==============

              LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------
Current liabilities:
   Bank line of credit payable .........................    $       4,410     $       4,680
   Current portion of long-term equipment debt and
    subordinated promissory notes ......................            1,965             2,101
   Accounts payable and other liabilities ..............            3,012             3,052
                                                            --------------    --------------
       Total current liabilities .......................            9,387             9,833

Long-term liabilities:
   Subordinated promissory notes .......................              734               284
   Long-term equipment debt, excluding current portion              1,779             2,767
                                                            --------------    --------------
       Total liabilities ...............................           11,900            12,884
                                                            --------------    --------------
Commitments and contingencies (Notes 3 and 10)

Shareholders' equity:
   Common stock, par value $.01 per share;
    20,000,000 shares authorized; 7,234,168 and
    7,211,751 issued and outstanding at
    June 30, 2003 and 2002, respectively ...............               72                72
   Additional paid-in capital ..........................           11,458            11,442
   Accumulated deficit .................................           (7,419)           (5,838)
                                                            --------------    --------------
       Total shareholders' equity ......................            4,111             5,676
                                                            --------------    --------------
       Total liabilities and shareholders' equity ......    $      16,011     $      18,560
                                                            ==============    ==============
</TABLE>



                SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-3

<PAGE>

<TABLE>
<CAPTION>
                               STREICHER MOBILE FUELING, INC.

                           CONSOLIDATED STATEMENTS OF OPERATIONS

     FOR THE YEARS ENDED JUNE 30, 2003 AND 2002, THE FIVE-MONTH TRANSITION PERIOD ENDED
                     JUNE 30, 2001 AND THE YEAR ENDED JANUARY 31, 2001
                        (in 000's, except share and per share data)


                                                                            Transition      Transition
                                         Fiscal Year      Fiscal Year         Period          Period         Fiscal Year
                                           June 30,          June 30,        June 30,        June 30,        January 31,
                                            2003              2002            2001            2000              2001
                                         ------------     ------------     ------------     ------------     ------------
                                                                                            (unaudited)
<S>                                      <C>              <C>              <C>              <C>              <C>
Fuel sales and service revenues ....     $    53,579      $    43,538      $    22,235      $    26,944      $    65,002
Fuel taxes .........................          18,615           17,311            7,275            9,537           21,455
                                         ------------     ------------     ------------     ------------     ------------
    Total revenues .................          72,194           60,849           29,510           36,481           86,457

Cost of fuel sales and service .....          49,556           38,947           21,495           25,607           61,909
Fuel taxes .........................          18,615           17,311            7,275            9,537           21,455
                                         ------------     ------------     ------------     ------------     ------------
    Total cost of sales ............          68,171           56,258           28,770           35,144           83,364

      Gross profit .................           4,023            4,591              740            1,337            3,093

Selling, general and administrative
  expenses..........................           4,716            4,382            2,126            1,209            2,852
                                         ------------     ------------     ------------     ------------     ------------
      Operating income (loss) ......            (693)             209           (1,386)             128              241

Beneficial conversion of debt to
  equity interest expense ..........              --             (241)              --               --               --
Interest expense ...................            (915)          (1,175)            (590)            (665)          (1,645)
Interest and other income ..........              27               45               25               25               69
                                         ------------     ------------     ------------     ------------     ------------

      Loss before income taxes .....          (1,581)          (1,162)          (1,951)            (512)          (1,335)

Income tax expense .................              --               --               --               --               --
                                         ------------     ------------     ------------     ------------     ------------
      Net loss .....................     $    (1,581)     $    (1,162)     $    (1,951)     $      (512)     $    (1,335)
                                         ============     ============     ============     ============     ============

Basic and Diluted net loss per
  share ............................     $      (.22)     $      (.20)     $      (.47)     $      (.19)     $      (.49)
                                         ============     ============     ============     ============     ============
Basic and Diluted weighted average
  common shares outstanding ........       7,221,070        5,698,147        4,194,283        2,712,220        2,716,855
                                         ============     ============     ============     ============     ============
</TABLE>


          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-4

<PAGE>

<TABLE>
<CAPTION>
               STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

  FOR THE YEARS ENDED JUNE 30, 2003 AND 2002, THE FIVE-MONTH TRANSITION PERIOD
             ENDED JUNE 30, 2001 AND THE YEAR ENDED JANUARY 31, 2001
                          (in 000's, except share data)


                                                                Common Stock            Additional
                                                         ---------------------------      Paid-in       Accumulated
                                                           Shares          Amount         Capital         Deficit          Total
                                                         -----------     -----------    -----------     -----------     -----------
<S>                                                       <C>            <C>            <C>             <C>             <C>
BALANCE, JANUARY 31, 2000 ..........................      2,710,400      $       27     $    5,651      $   (1,390)     $    4,288

Net loss ...........................................             --              --             --          (1,335)         (1,335)
Exercise of stock options ..........................          2,200              --              8              --               8
Net proceeds from private placement of stock........        531,667               5          1,898              --           1,903
Conversion of note payable to equity ...............        333,333               3            497              --             500
Treasury stock purchased and retired ...............        (67,343)             --           (146)             --            (146)
                                                         -----------     -----------    -----------     -----------     -----------

BALANCE, JANUARY 31, 2001 ..........................      3,510,257              35          7,908          (2,725)          5,218

Net loss ...........................................             --              --             --          (1,951)         (1,951)
Issuance of stock held as subscribed ...............        811,666               8            (12)             --              (4)
Net proceeds from private placement of stock........         35,000               1             52              --              53
Issuance of stock in lieu of debt ..................         10,614              --             16              --              16
                                                         -----------     -----------    -----------     -----------     -----------

BALANCE, JUNE 30, 2001 .............................      4,367,537              44          7,964          (4,676)          3,332

Net loss ...........................................             --              --             --          (1,162)         (1,162)
Net proceeds from private placement of stock........        666,666               7            573              --             580
Issuance of stock in lieu of debt ..................         67,226              --             91              --              91
Conversion of note payable to equity ...............      2,110,322              21          2,814              --           2,835
                                                         -----------     -----------    -----------     -----------     -----------

BALANCE, JUNE 30, 2002 .............................      7,211,751              72         11,442          (5,838)          5,676

Net loss ...........................................             --              --             --          (1,581)         (1,581)
Cost associated with extension of warrants..........             --              --             (9)             --              (9)
Issuance of stock in lieu of debt ..................         22,417              --             25              --              25
                                                         -----------     -----------    -----------     -----------     -----------

BALANCE, JUNE 30, 2003 .............................      7,234,168      $       72     $   11,458      $   (7,419)     $    4,111
                                                         ===========     ===========    ===========     ===========     ===========
</TABLE>


          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-5

<PAGE>
               STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

      FOR THE YEARS ENDED JUNE 30, 2003 AND 2002, THE FIVE-MONTH TRANSITION
       PERIOD ENDED JUNE 30, 2001 AND THE YEAR ENDED JANUARY 31, 2001
           (in 000's, except supplemental disclosure and share data)
<TABLE>
<CAPTION>
                                                                           Transition    Transition
                                                 Fiscal Year  Fiscal Year   Period         Period      Fiscal Year
                                                  June 30,     June 30,    June 30,       June 30,     January 31,
                                                   2003         2002        2001            2000          2001
                                                 -----------  -----------  ----------   -----------    -----------
                                                                                        (unaudited)
<S>                                              <C>          <C>          <C>          <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss ................................     $(1,581)     $(1,162)     $(1,951)     $  (512)       $(1,335)
   Adjustments to reconcile net loss to
    net cash provided by (used in)
    operating  activities:
       Loss on asset disposal ..............          --            9           18           --              4
       Depreciation and amortization .......       1,403        1,458          613          535          1,349
       Interest expense from beneficial
         conversion of debt to equity ......          --          241           --           --             --
       Provision for doubtful accounts .....         263          637           37           38             90
   Changes in operating assets and liabilities:
       Decrease (increase) in
         restricted cash ...................         167          (21)         580          312           (282)
       Decrease (increase) in accounts
          receivable .......................         118        1,650          931          540           (287)
       Decrease (increase) in
         inventories, prepaid expenses
         and other assets ..................          90          143          133          142           (213)
       (Decrease) increase in
         accounts payable and other
         liabilities .......................         (15)        (456)        (511)        (236)            36
                                                 --------     --------     --------     --------       --------
       Net cash provided by (used in)
         operating activities ..............         445        2,499         (150)         819           (638)
                                                 --------     --------     --------     --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of property and
         equipment .........................        (248)        (152)        (288)      (1,117)        (1,410)
       Proceeds from disposal of
         equipment .........................           4          276           29           --             21
       Decrease (increase) note
         receivable due from
         related party .....................         148          443          (43)         (19)           (39)
                                                 --------     --------     --------     --------       --------
       Net cash provided by (used in)
         investing activities ..............         (96)         567         (302)      (1,136)        (1,428)
                                                 --------     --------     --------     --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Change in bank overdraft ................          --         (318)         318          294             --
   Net repayments on line of credit ........        (270)      (2,225)        (381)        (471)          (394)
   Proceeds from the issuance of
     subordinated debt .....................          --        1,700        1,000           --             --
   Proceeds from the issuance of
     subordinated promissory notes .........         905           --          100          917          2,092
   Repayments on subordinated promissory
     notes .................................        (155)          --           --           --             --
   Principal payments on long-term debt ....      (1,424)      (2,114)      (1,091)        (760)        (1,949)
   Net proceeds (costs) from issuance of
     common stock and common stock
     warrants ..............................          (9)         700           65           60          2,411
                                                 --------     --------     --------     --------       --------
     Net cash provided by (used in)
       financing activities ................        (953)      (2,257)          11           40          2,160
                                                 --------     --------     --------     --------       --------

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS .............................        (604)         809         (441)        (277)            94
CASH AND CASH EQUIVALENTS,
     beginning of period ...................         815            6          447          353            353
                                                 --------     --------     --------     --------       --------
CASH AND CASH EQUIVALENTS,
     end of period .........................     $   211      $   815      $     6      $    76        $   447
                                                 ========     ========     ========     ========       ========
</TABLE>
          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-6
<PAGE>

<TABLE>
<CAPTION>
               STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

      FOR THE YEARS ENDED JUNE 30, 2003 AND 2002, THE FIVE-MONTH TRANSITION
       PERIOD ENDED JUNE 30, 2001 AND THE YEAR ENDED JANUARY 31, 2001
           (in 000's, except supplemental disclosure and share data)


(Continued)
                                                                           Transition   Transition
                                                 Fiscal Year  Fiscal Year    Period       Period       Fiscal Year
                                                   June 30,     June 30,     June 30,     June 30,     January 31,
                                                    2003         2002         2001         2000           2001
                                                 -----------  -----------  ----------   -----------    -----------
                                                                                        (unaudited)
<S>                                              <C>          <C>          <C>          <C>            <C>
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
  Cash paid for-
   Interest.................................     $   880      $ 1,193      $   615      $   668        $ 1,642
                                                 --------     --------     --------     --------       --------
   Income taxes.............................     $    --      $    --      $    --      $    --        $    --
                                                 --------     --------     --------     --------       --------
</TABLE>


SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

FISCAL YEAR ENDED JUNE 30, 2003:

   Issuance of $25,000 of common stock in lieu of payment of interest on
      subordinated convertible promissory notes
   Transfer of $112,000 of fixed assets to account receivable from third
      party relating to disposal of vehicle

FISCAL YEAR ENDED JUNE 30, 2002:

   Conversion of $2,617,000 of subordinated convertible promissory notes into
      common stock resulting in a non-cash charge to interest expense of
      $241,000
   Issuance of $91,000 of common stock in lieu of payment on subordinated
      convertible promissory notes
   Transfer of $60,000 of fixed assets to note receivable from related party

FIVE MONTHS ENDED JUNE 30, 2001:

   Issuance of $16,000 of common stock in lieu of payment on subordinated
      convertible promissory notes

FISCAL YEAR ENDED JANUARY 31, 2001:

   Conversion of $500,000 of subordinated convertible promissory notes into
      common stock
   Exchange of receivable of $147,000 from related party for 67,343 shares of
      common stock


          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       F-7
<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(1)   NATURE OF OPERATIONS

      Streicher Mobile Fueling, Inc., a Florida corporation (the "Company")
      was formed in 1996.

      The Company provides mobile fueling and fuel management out-sourced
      services to businesses that operate all size fleets of vehicles and
      equipment, including governmental agencies, utilities, trucking companies,
      bus lines, hauling and delivery services, courier services, construction
      companies and others. The Company's specialized truck fleet delivers fuel
      to customers' locations on a regularly scheduled or as needed basis,
      refueling vehicles and equipment and/or re-supplying fixed-site storage
      facilities. The Company's patented proprietary electronic fuel tracking
      control system is used to measure, record and track fuel dispensed to each
      vehicle and tank fueled at a customer location, allowing verification of
      the amount and type of fuel delivered and providing customers with
      customized fleet fuel data for management analysis and tax reporting. At
      June 30, 2003, the Company had operations in California, Florida, Georgia,
      North Carolina, Tennessee and Texas.

      The Company generates substantially all of its revenue from mobile fueling
      and fuel management services. Revenue is comprised principally of delivery
      service charges and the related sales of diesel fuel and gasoline. Cost of
      sales is comprised principally of direct operating expenses and the cost
      of fuel. Included in both revenue and cost of sales are federal and state
      fuel taxes, which are collected by the Company from its customers, when
      required, and remitted to the appropriate taxing authority. The Company
      provides mobile fueling and fuel management services at a minimum rate.
      Included in the rate are negotiated service charges and the cost of fuel
      based on market prices. Revenue and cost of fuel will vary depending on
      the upward or downward movement of fuel prices in each market.

      In the mobile fueling business, the majority of deliveries are made on
      workdays, Monday through Friday, to coincide with customers' fuel service
      requirements. Thus, the number of workdays in any given month will impact
      the quarterly financial performance of the Company. In addition, a
      downturn in customer demand generally takes place on and/or in conjunction
      with national holidays, resulting in decreased volumes of fuel delivered.
      This downturn may be offset during the fiscal year by emergency mobile
      fueling services and fuel deliveries to certain customers resulting from
      impending or actual severe meteorological or geological events, including
      hurricanes, tropical storms, ice and snow storms, forest fires and
      earthquakes.


(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a)   Basis of Presentation

            The  consolidated  financial  statements  include the  accounts of
            Streicher Mobile Fueling,  Inc. and its wholly owned subsidiaries,
            Streicher West, Inc.,  Streicher Realty, Inc., and Mobile Computer
            Systems,  Inc.  As of August 8, 2001 the  Company's  subsidiaries,
            Streicher  West,  Inc. and Mobile  Computer  Systems,  Inc.,  were
            merged into Streicher  Realty,  Inc.,  the surviving  corporation.
            All significant  intercompany  balances and transactions have been
            eliminated in consolidation.

            Effective July 19, 2001, the Company changed its fiscal year-end
            from January 31 to June 30. The five-month transition period of
            February 1, 2001 through June 30, 2001 ("transition period")
            preceded the start of the new fiscal year.

                                       F-8

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      (b)   Cash and Cash Equivalents

            The Company considers all highly liquid investments with original
            maturities of three months or less to be cash equivalents. Included
            in cash and cash equivalents in the accompanying consolidated
            balance sheets is interest bearing cash of approximately $211,000
            and $815,000 as of June 30, 2003 and 2002, respectively.

      (c)   Restricted Cash

            Restricted cash at June 30, 2003 and 2002 consists of $78,000 and
            $245,000, respectively, in collections on customer accounts
            receivable, which were deposited in a restricted account and used to
            repay advances made to the Company on its working capital line of
            credit.

      (d)   Accounts Receivable

            Accounts receivable are due from customers within a broad range of
            industries and are generally unsecured. Additionally, accounts
            receivable are composed of refunds from state and federal
            governments for fuel taxes which are not billable to certain
            customers, yet have been paid to vendors by the Company and other
            receivables from insurance companies for policy refunds and
            insurance claims. The Company provides for credit losses based on
            management's evaluation of collectibility based on current and
            historical performance of each customer and from state and federal
            governments from whom refunds are expected.

            A roll forward of the activity in the allowance for doubtful
            accounts for the indicated periods is as follows:

<TABLE>
<CAPTION>
                                                                                  Transition
                                                  Fiscal Year     Fiscal Year       Period        Fiscal Year
                                                    June 30,        June 30,       June 30,       January 31,
                                                      2003            2002           2001            2001
                                                  -----------    ------------     -----------     -----------
            <S>                                   <C>            <C>              <C>             <C>
            Balance - beginning of period         $  509,000     $    78,000      $   55,000      $  111,000
            Provision for bad debts                  263,000         637,000          37,000          90,000
            Write-offs, net of recoveries           (242,000)       (206,000)        (14,000)       (146,000)
                                                  -----------    ------------     -----------     -----------
            Balance - end of period               $  530,000     $   509,000      $   78,000      $   55,000
                                                  ===========    ===========      ===========     ===========
</TABLE>

       (e)  Inventories

            Inventories, consisting primarily of diesel fuel and gasoline, are
            stated at the lower of cost or market and include federal and state
            fuel taxes payable to vendors. Cost is determined using the
            first-in, first-out method.

      (f)   Property and Equipment

            Property and equipment are stated at cost less accumulated
            depreciation and amortization. Ordinary maintenance and repairs are
            expensed as incurred. Improvements which significantly increase the
            value or useful life of property and equipment are capitalized.
            Property and equipment are depreciated or amortized using the
            straight-line method over their estimated useful lives. Property and
            equipment balances and the estimated useful lives were as follows at
            the indicated dates:

                                       F-9

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                         June 30,
                                              --------------------------------        Estimated Useful
                                                  2003              2002                    Life
                                              --------------    --------------    --------------------------
            <S>                               <C>               <C>               <C>
            Fuel trucks, tanks and vehicles      14,450,000        14,681,000           5 - 25 years
            Machinery and equipment                 302,000         1,148,000           3 - 5 years
            Furniture and fixtures                  260,000           295,000           5 - 10 years
            Leasehold improvements                   22,000            19,000     Lesser of lease term or
                                                                                        useful life
            Software                                270,000            46,000             3 years
            Land                                     67,000            67,000                --
                                              --------------    --------------
                                                 15,371,000        16,256,000
            Less: Accumulated depreciation
               and amortization                  (6,630,000)       (6,244,000)
                                              --------------    --------------
            Property and equipment, net           8,741,000        10,012,000
                                              ==============    ==============
</TABLE>

            In accordance with Statement of Position 98-1, "Accounting for the
            Costs of Computer Software Developed or Obtained for Internal Use,"
            the Company capitalizes certain costs used in the development of
            internal use software. These costs include the costs associated with
            coding, software configuration, upgrades and enhancements. The
            amount capitalized at June 30, 2003 and 2002 relating to internal
            use software is $252,000 and $31,000, respectively.

      (g)   Income Taxes

            Income taxes are accounted for under the asset and liability method,
            in accordance with Statement of Financial Accounting Standards No.
            109, "Accounting for Income Taxes" (SFAS 109). Deferred tax assets
            and liabilities are recognized for the future tax consequences
            attributable to differences between the financial statement carrying
            amounts of existing assets and liabilities and their respective tax
            bases and operating loss and tax credit carryforwards. Deferred tax
            liabilities are measured using enacted tax rates expected to apply
            to taxable income in the years in which those temporary differences
            are expected to be recovered or settled. The effect on deferred tax
            assets and liabilities of a change in tax rates is recognized in
            income in the period that includes the enactment date.

      (h)   Revenue Recognition

            The Company recognizes revenue at the time services are performed
            which is when the fuel is delivered and the customer takes ownership
            and assumes risk of loss.

      (i)   Use of Estimates

            The preparation of financial statements in conformity with
            accounting principles generally accepted in the United States of
            America requires management to make estimates and assumptions. These
            assumptions, if not realized, could affect the reported amounts of
            assets and liabilities and disclosure of contingent assets and
            liabilities at the date of the financial statements and the reported
            amounts of revenue and expenses during the reporting period. Actual
            results could differ from those estimates.

                                      F-10

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      (j)   Fair Value of Financial Instruments

            The Company's financial instruments, primarily consisting of cash
            and cash equivalents, accounts receivable, note receivable from
            related party, accounts payable, bank line of credit payable,
            subordinated promissory notes and long-term debt, approximate fair
            value due to their short-term nature or interest rates that
            approximate current market rates.

      (k)   Net Income or Loss Per Share

            Net income or loss per share is determined by dividing net income or
            loss by the weighted average common shares outstanding. Common stock
            equivalents, consisting of employee stock options and common stock
            warrants, in the amount of 2,604,777, 2,516,852, 2,509,052 and
            2,379,052 for the years ended June 30, 2003 and 2002, the five-month
            transition period ended June 30, 2001, and the year ended January
            31, 2001, respectively, were antidilutive and were not included in
            the computation of net loss per share in those fiscal years.

      (l)   Impairment or Disposal of Long-Lived Assets

            The Company accounts for long-lived assets in accordance with the
            provisions of SFAS No. 144, "Accounting for the Impairment or
            Disposal of Long-Lived Assets." This Statement requires that
            long-lived assets be reviewed for impairment whenever events or
            changes in circumstances indicate that the carrying amount of an
            asset may not be recoverable. Recoverability of assets to be held
            and used is measured by a comparison of the carrying amount of an
            asset to future net cash flows expected to be generated by the
            asset. If the carrying amount of an asset exceeds its estimated
            future cash flows, an impairment charge is recognized by the amount
            by which the carrying amount of the asset exceeds the fair value of
            the asset. Assets to be disposed of are reported at the lower of the
            carrying amount or fair value less costs to sell.

      (m)   Stock Options

            The Company applies the intrinsic value-based method of accounting
            prescribed by Accounting Principles Board ("APB") Opinion No. 25,
            "Accounting for Stock Issued to Employees," and related
            interpretations including FASB Interpretation No. 44, "Accounting
            for Certain Transactions involving Stock Compensation an
            interpretation of APB Opinion No. 25" issued in March 2000, to
            account for its fixed plan stock options. Under this method,
            compensation expense is recorded on the date of grant only if the
            current market price of the underlying stock exceeded the exercise
            price. SFAS No. 123, "Accounting for Stock-Based Compensation,"
            established accounting and disclosure requirements using a fair
            value-based method of accounting for stock-based employee
            compensation plans. As allowed by SFAS No. 123, the Company has
            elected to continue to apply the intrinsic value-based method of
            accounting described above, and has adopted the disclosure
            requirements of SFAS No. 123.

            The Company has adopted SFAS No. 123, "Accounting for Stock-Based
            Compensation." As permitted under the provisions of SFAS No. 123,
            the Company applies the principles of APB Opinion 25 and related
            interpretations in accounting for its stock option plans. If the
            Company had elected to recognize compensation cost based on the fair
            value of the options granted at grant date as prescribed by SFAS No.
            123, net loss and loss per share would have been reduced to
            the pro forma amounts indicated in the table below. The fair value
            of each option grant was estimated at the date of grant using the
            Black-Scholes option pricing model.

                                      F-11

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



            The Company's net income or loss, pro forma net loss, net income or
            loss per share, pro forma net loss per share, and related
            assumptions are as follows:

<TABLE>
<CAPTION>
                                              Fiscal Year      Fiscal Year      Transition       Fiscal Year
                                               June 30,         June 30,         June 30,        January 31,
                                                 2003             2002             2001              2001
                                             -------------    -------------    -------------    --------------
<S>                                           <C>              <C>              <C>              <C>
            Net income (loss) as reported     $  (1,581)       $  (1,162)       $  (1,951)       $   (1,335)
            Net income (loss) pro forma       $  (2,137)       $  (1,287)       $  (2,144)       $   (1,509)

            Fully  diluted  net income
            (loss) per share as reported      $    (.22)       $    (.20)       $    (.47)       $     (.49)
            Fully  diluted  net income
            (loss) per share pro forma        $    (.30)       $    (.23)       $    (.51)       $     (.56)

            Risk free interest rate              3%               3%              3.5%               7%
            Dividend yield                       0%               0%               0%                0%
            Expected volatility                 100%             100%             100%              50%
            Expected life                     10 years         10 years         10 years          10 years
</TABLE>


            The full impact of calculating compensation cost for stock options
            under SFAS No. 123 is not reflected in the pro forma loss amounts
            presented because compensation cost is reflected over the vesting
            period of the options.

      (n)   Recent Accounting Pronouncements

            In November 2002, the Financial Accounting Standards Board ("FASB")
            issued FASB Interpretation No. 45, "Guarantor's Accounting and
            Disclosure Requirements for Guarantees, Including Indirect
            Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 requires
            the recognition of a liability for certain guarantee obligations
            issued or modified after December 31, 2002. FIN 45 also clarifies
            disclosure requirements to be made by a guarantor for certain
            guarantees. The disclosure provisions of FIN 45 were effective for
            fiscal years ending after December 15, 2002. The Company adopted the
            disclosure provisions of FIN 45 as of June 30, 2003 and the adoption
            the accounting requirements effective July 1, 2003. The adoption of
            FIN 45 did not have a significant impact on the Company's
            consolidated financial position, results of operations or cash
            flows.

            In January 2003, the FASB issued FASB Interpretation No. 46
            "Consolidation of Variable Interest Entities, an Interpretation of
            APB No. 50," ("FIN 46"). FIN 46 requires certain variable interest
            entities to be consolidated by the primary beneficiary of the entity
            if the equity investors in the entity do not have the
            characteristics of a controlling financial interest or do not have
            sufficient equity at risk for the entity to finance its activities
            without additional subordinated financial support from other
            parties. FIN 46 is effective for all new variable interest entities
            created or acquired after January 31, 2003. For variable interest
            entities created or acquired prior to February 1, 2003, the
            provisions of FIN 46 must be applied for the first interim or annual
            period beginning after June 15, 2003. The Company did not create or
            acquire any variable interest entities between January 31, 2003 and
            June 30, 2003. Similarly, the Company does not have any variable
            interest entities created or acquired prior to February 1, 2003 that
            would have a significant impact on the Company's consolidated
            financial position, results of operations or cash flows upon
            adoption of the remaining provisions of FIN 46 for the quarter ended
            September 30, 2003.

            In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133
            on Derivative Instruments and Hedging Activities." SFAS 149
            clarifies under what circumstances a contract with an initial net
            investment meets the characteristics of a derivative and clarifies
            when a derivative

                                      F-12

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



            contains a financing component that warrants special reporting in
            the statement of cash flows. SFAS 149 amends certain other
            existing pronouncements. SFAS 149 is generally effective for
            contracts entered into or modified after June 30, 2003 and should
            be applied prospectively. The adoption of SFAS 149 is not
            expected to have a significant impact on the Company's
            consolidated financial position, results of operations or cash
            flows.

            In May 2003, the FASB issued SFAS 150, "Accounting for Certain
            Financial Instruments with Characteristics of both Liabilities and
            Equity," effective for financial instruments entered into or
            modified after May 31, 2003, and otherwise is effective at the
            beginning of the first interim period beginning after June 15, 2003.
            This statement establishes standards for how an issuer classifies
            and measures certain financial instruments with characteristics of
            both liabilities and equity. It requires that an issuer classify a
            freestanding financial instrument that is within its scope as a
            liability (or an asset in some circumstances). The Company did not
            issue any financial instruments between May 31, 2003 and June 30,
            2003 and does not expect SFAS 150 to have a significant impact on
            the Company's consolidated financial position, results of operations
            or cash flows.

      (o)   Reclassifications
            Certain prior period amounts have been reclassified to conform to
            the current year presentation.


(3)   CAPITAL RESOURCES AND LIQUIDITY

      In August 2003 the Company raised $6.925 million from the issuance of
      five-year 10% promissory notes (the "August 2003 refinancing" and the
      "August 2003 promissory notes") and 2,008,250 five-year warrants to
      purchase the Company's common stock at $1.00 per share. The notes are
      collateralized by a first priority security interest in the Company's
      specialized fueling truck fleet and related equipment and by the patents
      on its proprietary fuel management system. The resulting liquidity impact
      of this financing transaction has been the repayment of all outstanding
      equipment and subordinated debt; the generation of $2.9 million of working
      capital for business expansion; and a $2.8 million improvement in cash
      flow resulting from a moratorium of principal payments during the first
      two years of the five-year term of the notes.

      In its financial statements for the first quarter ended September 30, 2003
      the Company expects to record a pre-tax gain of $757,000 from the
      prepayment of the outstanding balance owed to its principal equipment
      lender; and an increase in shareholders' equity of $1.84 million for the
      value of the 2,008,250 warrants issued in connection with the August 2003
      refinancing. During the period from February 2001 to June 30, 2003, the
      Company raised in the aggregate $6.7 million in equity capital through
      private placements of common stock and the issuance of subordinated debt.
      During the year ended June 30, 2003, the Company raised $750,000 from the
      private placements of subordinated debt (more fully described in Note 6),
      the proceeds from which have been used for working capital in the
      Company's operations.

      In January 2002, certain holders of $2.617 million of the Company's
      convertible subordinated promissory notes converted that debt into
      unregistered shares of the Company's common stock at a conversion
      price of $1.24 per share, for a total of 2,110,322 shares of common
      stock. The notes converted contained conversion rates ranging from
      $1.35 to $1.50 per share. The conversion resulted in the Company
      recording a one time, non-cash beneficial conversion of debt to equity
      interest expense of $241,000 during the quarter ended March 31, 2002.
      The beneficial conversion of debt to equity interest expense had no
      impact on shareholders' equity.

      The Company is highly leveraged and since its inception has financed its
      working capital requirements for operations by issuing common stock and
      subordinated debt and utilizing its bank line of credit.

                                      F-13

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      The Company has incurred net losses during most of its operating history
      and has met its working capital and long-term debt service requirements by
      raising both equity capital and subordinated debt and utilizing its bank
      line of credit. For the years ended June 30, 2003, 2002 and 2001, the
      Company had net losses of $1.6 million, $1.2 million, and $2.8 million,
      respectively. The Company earned net income of $63,000 in the fourth
      quarter of its year ended June 30, 2002, and $103,000 in the first quarter
      of its year ended June 30, 2003. The other quarterly results during this
      three-year period were net losses.

      The Company's material financial commitments, other than payroll, relate
      primarily to maintaining its bank line of credit and making monthly
      payments of principal and interest on equipment notes through August 2003;
      making semi-annual interest payments on its August 2003 promissory notes
      beginning December 31, 2003; and making semi-annual principal and interest
      payments for the remaining three year term of the August 2003 promissory
      notes, with a balloon payment of $3,000,000 due August 28, 2008.

      The Company's debt agreements contain covenants establishing certain
      financial requirements and operating restrictions. The Company's failure
      to comply with any covenant or material obligation contained in these debt
      agreements, absent a waiver or forbearance from the lenders, would result
      in an event of default which could accelerate debt repayment terms under
      the debt agreements. Due to cross-default provisions contained in its debt
      agreements, an event of default could accelerate repayment terms under the
      other agreements, which would have a material adverse affect on the
      Company's liquidity and capital resources.


(4)   BANK LINE OF CREDIT PAYABLE

      On September 26, 2002, the Company entered into a new three-year
      $10 million credit facility with a national financial institution,
      replacing its prior short-term $10 million credit facility. This bank
      line of credit permits the Company to borrow up to 85% of the total
      amount of eligible accounts receivable. Interest is payable monthly at
      6.0% (1.75% over the prime rate of 4.25% at June 30, 2003), and
      outstanding borrowings under the line are secured by substantially all
      Company assets other than its truck fleet and related equipment. The
      maturity date of the line of credit is September 25, 2005. If the
      Company elects to terminate the credit facility prior to such date,
      prepayment fees of 3%, 1.5% and .5% will apply during years one, two
      and three, respectively. In addition, the credit facility may be
      extended by the mutual consent of the Company and the bank after
      September 25, 2005. Effective March 31, 2003, the Company and its
      lender revised one of the financial covenants to include all
      subordinated debt in the calculation of its effective book net worth.

      As of June 30, 2003 and 2002, the Company had outstanding borrowings of
      $4.4 million and $4.7 million, respectively, under its $10.0 million bank
      lines of credit. Based on eligible receivables outstanding at June 30,
      2003, the Company had $101,000 of cash availability on the bank line of
      credit, and was in compliance with all financial covenants required by the
      loan and security agreement.

                                      F-14

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      In August 2003, the Company and its bank line of credit lender amended the
      loan and security agreement between them in connection with the Company's
      August 2003 refinancing which (1) released the lender's lien on patents,
      patent rights and patent applications; (2) increased the unused line of
      credit fee by .50%; (3) revised the effective book net worth covenant to
      include the August 2003 promissory notes in its calculation; (4)
      established a covenant to maintain a minimum quarterly fixed charge
      coverage ratio as defined in the amended loan agreement; (5) established a
      covenant for the Company to maintain a minimum excess availability of
      $500,000; and (6) eliminated the loan prepayment fee. The Company utilized
      a portion of the proceeds of the August 2003 refinancing to pay down the
      bank line of credit by $2.9 million. These proceeds that were used to pay
      down the outstanding line of credit balance are available to the Company
      for working capital.


 (5)  LONG-TERM EQUIPMENT DEBT

<TABLE>
<CAPTION>
      Long-term equipment debt consists of the following:

                                                                                             June 30,
                                                                                   ----------------------------
                                                                                       2003           2002
                                                                                   ------------   -------------
<S>                                                                                <C>            <C>
        Equipment debt (10.18% weighted average
          interest rate at June 30, 2003 and 2002) due in monthly
          installments with varying maturities through October 2005                $ 3,444,000    $  4,868,000

        Less: current portion                                                       (1,665,000)     (2,101,000)
                                                                                   ------------    ------------

        Long-term equipment debt, excluding current portion                        $ 1,779,000     $ 2,767,000
                                                                                   ============    ============

        Future principal payments on equipment debt are due as follows
          as of June 30, 2003:

                                     Year Ended June 30,
                                     -------------------
                                            2004           $   1,665,000
                                            2005               1,694,000
                                            2006                  85,000
                                                           --------------
                                                           $   3,444,000
                                                           ==============
</TABLE>

      In December 2002, the Company and its principal equipment lender amended
      the notes and security agreements between them to extend the maturity
      dates of the equipment notes payable by three months. This revision
      modified the repayment schedule by reducing principal payments for the
      period of December 2002 through April 2003 by $467,000. In May 2003, the
      Company and this lender agreed to an additional extension of the maturity
      dates of the equipment notes by two months and reduced its payments for
      the period from May 2003 through August 2003 by $284,000. In August 2003
      this lender was repaid in full in the amount of $2,204,815 from the
      proceeds of the August 2003 promissory notes. The Company received a
      $757,000 cash discount from the lender in consideration of the prepayment
      of the equipment debt.

      During August and September 2003, the Company repaid all the remaining
      long-term and current portions of equipment debt outstanding at June 30,
      2003 from the proceeds of the August 2003 refinancing. The notes are
      collateralized by a first priority security interest in the Company's
      specialized fueling truck fleet and related equipment and by the patents
      on its proprietary fuel management system.

                                      F-15

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(6)   DEBT AND EQUITY SECURITIES

      The following schedule presents the activity of subordinated debt
      securities for the years ended June 30, 2003 and 2002:

            Subordinated debt at June 30, 2001              $1,200,000
            Issuances of subordinated debt                   1,700,000
            Conversion of subordinated debt to equity       (2,616,000)
                                                            -----------

            Subordinated debt at June 30, 2002                 284,000
            Issuances of subordinated debt                     750,000
                                                            -----------

            Subordinated debt at June 30, 2003              $1,034,000
                                                            ===========

      At June 30, 2003, $734,000 of subordinated debt was classified as long
      term on the Company's balance sheet, and $300,000 classified as current.

      SUBORDINATED DEBT SECURITIES

      In July 2001, the Company issued $600,000 of convertible subordinated
      promissory notes to three shareholders. The notes are due on August 31,
      2003 and bear interest at 1% over the prime interest rate announced from
      time to time by the Company's principal lender. With the consent of the
      Payee, the interest on the notes may be paid in Company stock, with the
      stock value based on the average market price of the stock for the quarter
      in which interest is due. The notes provide the note holder the right and
      option to request a prepayment of the outstanding principal amount and
      accrued interest thereon from the net proceeds of any issuance or sale by
      the Company of equity or debt securities from and after July 6, 2001. The
      notes contain a conversion feature entitling the note holder to convert
      the note balance into common stock of the Company at the rate of $1.35 per
      share. These notes were converted to common stock in January 2002 (see
      January 2002 Conversion of Subordinated Debt).

      In September 2001, the Company issued $800,000 of convertible subordinated
      promissory notes to five shareholders. The notes are due on August 31,
      2003 and bear interest at 3% over the prime interest rate announced from
      time to time by the Company's principal lender. With the consent of the
      Payee, the interest on the notes may be paid in Company stock, with the
      stock value based on the average market price of the stock for the quarter
      in which interest is due. The notes provide the note holder the right and
      option to request a prepayment of the outstanding principal amount and
      accrued interest thereon from the net proceeds of any issuance or sale by
      the Company of equity or debt securities from and after July 6, 2001. The
      notes contain a conversion feature entitling the note holder to convert
      the note balance into common stock of the Company at the rate of $1.35 per
      share. These notes were converted to common stock in January 2002 (see
      January 2002 Conversion of Subordinated Debt).

      In October 2001, the Company issued $300,000 of convertible subordinated
      promissory notes to three shareholders. The notes are due on August 31,
      2003 and bear interest at 3% over the prime interest rate announced from
      time to time by the Company's principal lender. With the consent of the
      Payee, the interest on the notes may be paid in Company stock, with the
      stock value based on the average market price of the stock for the quarter
      in which interest is due. The notes provide the note holder the right and
      option to request a prepayment of the outstanding principal amount and
      accrued interest thereon from the net proceeds of any issuance or sale by
      the Company of equity or debt securities from and after July 6, 2001.

                                      F-16

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      The notes contain a conversion feature entitling the note holder to
      convert the note balance into common stock of the Company at the rate of
      $1.35 per share. These notes were converted to common stock in January
      2002 (see January 2002 Conversion of Subordinated Debt).

      On December 23, 2002, the Company issued a $150,000 short-term
      promissory note to a shareholder. The note was due on January 31,
      2003, with interest at 5% over the prime interest rate. On January 21,
      2003 the Company and the holder of the note substituted the note for a
      $150,000 subordinated promissory note due on January 31, 2005, bearing
      interest at an annual rate of 9%. With the consent of the holder,
      interest on the note may be paid in unregistered shares of the
      Company's common stock, with the stock value based on the closing bid
      price of the stock for the five trading days before the last day of
      the quarter in which the interest is due but in no event less than the
      closing bid price at the time of issuance or the average of the
      closing bid prices for the five trading days prior to such time,
      whichever is lower. The Company repaid this note in September 2003
      with the proceeds of the August 2003 refinancing.

      On January 21, 2003, the Company issued $300,000 of subordinated
      promissory notes to two shareholders. The notes are due on January 31,
      2005 and bear interest at an annual rate of 9%. With the consent of the
      holders, interest on the notes may be paid in the Company's common stock,
      with the stock value based on the closing bid price of the stock for the
      five trading days before the last day of the quarter in which the interest
      is due but in no event less than the closing bid price at the time of
      issuance or the average of the closing bid prices for the five trading
      days prior to such time, whichever is lower. The Company repaid this note
      in September 2003 with the proceeds of the August 2003 refinancing.

      On May 12, 2003, the Company issued $300,000 of promissory notes to
      certain shareholders. The notes bear interest at an annual rate of 14% and
      are payable on demand. The Company repaid $235,500 of these notes with the
      proceeds of the May 20, 2003 private placement issuance of subordinated
      promissory notes and common stock purchase warrants. The Company repaid
      the balance of the May 12, 2003 notes in September 2003 with the proceeds
      of the August 2003 refinancing.

      On May 20, 2003, the Company issued $235,500 of subordinated promissory
      notes to officers, directors and certain shareholders. The notes are due
      on November 19, 2003 and bear interest at an annual rate of 14%. With the
      consent of the holders, the Company may elect to pay interest on the notes
      in shares of the Company's common stock, with the stock value based on the
      most recent closing bid price of the stock at the time the notes were
      executed or for the five trading days before such date, whichever is
      lower. The Company also issued warrants to purchase 82,425 shares of
      common stock exercisable at $0.86 per share in connection with the notes.
      The warrants issued are exercisable for a period of three (3) years from
      and after the date on which the notes are repaid or otherwise surrendered
      to the Company, but in no event later than November 19, 2006. The Company
      repaid these notes in September 2003 with the proceeds of the August 2003
      refinancing.

      JANUARY 2002 CONVERSION OF SUBORDINATED DEBT

      In January 2002, certain holders of the convertible subordinated
      promissory notes converted an aggregate of $2.617 million to
      unregistered shares of the Company's common stock at a conversion
      price of $1.24 per share, for a total of 2,110,322 shares of the
      Company's common stock. The notes converted contained conversion rates
      ranging from $1.35 to $1.50 per share. The holders of the remaining
      $283,600 of convertible subordinated promissory notes issued by the
      Company who did not elect to so convert their notes in January 2002
      waived any conversion price adjustment. The accrued quarterly interest
      earned on these notes can be paid with shares of the Company's common
      stock instead of cash; however, two notes require the prior written
      consent of the payee for such payment in shares. In September 2002,
      the maturity dates of these non-

                                      F-17

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      converted notes were extended for one year to August 31, 2004. The
      outstanding balance of these notes was repaid in full in September
      2003 with proceeds from the issuance of the August 2003 promissory
      notes.

      EQUITY SECURITIES

      In January 2001, the Company issued 531,667 shares of common stock in a
      private placement at $1.50 per share. The Company also issued 333,333
      shares of common stock in January 2001 to three shareholders upon their
      conversion of a promissory note in the principal amount of $500,000, at a
      conversion price of $1.50. In February 2001 and March 2001, the Company
      issued a total of 846,666 shares of common stock in a private placement at
      $1.50 per share.

      In August 2001, the Company issued 133,333 shares of common stock in a
      private placement at $1.50 per share. In January 2002, the Company issued
      476,190 shares of common stock in a private placement at $1.05 per share.
      As a result of the reduction in the offering price in January 2002 to
      $1.05 per share, 57,143 additional shares were issued to the August 2001
      investor in January 2002, resulting in an effective price of $1.05 for all
      purchasers in the offering.


(7)   WARRANTS AND UNDERWRITER'S OPTION

      (a)   Public Offering Warrants

            The Company issued 1,150,000 common stock warrants in conjunction
            with its initial public offering in December 1996. Each warrant
            entitles the holder to purchase one share of common stock at a
            exercise price of $6.90 per share. In October 2002, the Company
            extended the expiration date of the warrants from December 11, 2002
            to December 11, 2003. The common stock underlying the warrants has
            been registered with the Securities and Exchange Commission. As of
            June 30, 2003, none of these warrants have been exercised.

            The number of shares of common stock that may be purchased upon
            exercise of the warrants will be adjusted if the Company makes a
            dividend distribution to its shareholders or subdivide, combine or
            reclassify its outstanding shares of common stock. In addition, the
            exercise price of the warrants will be adjusted, subject to certain
            exceptions, if the Company issues additional common stock or rights
            to acquire common stock at a price per share that is less than the
            current market price per share of common stock. For this purpose,
            the term "current market price" means the average of the daily
            closing prices for the twenty consecutive trading days ending three
            days prior to the issuance or record date. The exercise price of the
            warrants will also be adjusted if the Company consolidates or merges
            and make a distribution to its shareholders of assets or evidences
            of indebtedness (other than cash or stock dividends).

            The Company may redeem the warrants, at a redemption price of $0.01
            per warrant, at any time upon thirty days' prior written notice, if
            the average closing bid price of its common stock equals or exceeds
            $10.50 per share for twenty consecutive trading days.

            The Company may further extend the exercise period of the warrants
            at any time. If the Company does so, it will give written notice of
            the extension to the warrant holders prior to the expiration date in
            effect at the time of the extension. Also, the Company may reduce
            the exercise price of the warrants for limited periods or through
            the end of the exercise period if its Board of Directors deems it
            appropriate. The Company has not made any determination at this time
            as to a further extension of the exercise period or a reduction in
            the exercise price of the warrants.

                                      F-18

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      (b)   Underwriter's Option

            In connection with the initial public offering the Company sold the
            underwriter an option to purchase up to 100,000 shares of common
            stock at $9.30 per share and warrants at an exercise price of
            $.19375 to purchase an additional 100,000 shares, at an exercise
            price of $9.30 per share. The underwriter's option was extended
            concurrent with the warrants and currently expires on December 11,
            2003. The exercise price of the warrants subject to the
            underwriter's option and the number of shares of common stock
            covered by these warrants, are subject to adjustment on similar
            terms as the Company's other outstanding warrants. As of June 30,
            2003, none of these warrants have been exercised.

      (c)   May 2003 Warrants

            On May 20, 2003, the Company issued $235,500 of subordinated
            promissory notes to officers, directors and certain shareholders.
            The notes are due on November 19, 2003 and bear interest at an
            annual rate of 14%. The Company also issued warrants to purchase
            82,425 shares of common stock exercisable at $0.86 per share in
            connection with the notes. The Company repaid these notes in
            September 2003 with the proceeds of the August 2003 refinancing. As
            of June 30, 2003, none of these warrants were exercisable.

            The number of shares of common stock that may be purchased upon
            exercise of the warrants will be adjusted if the Company makes a
            dividend distribution to its shareholders or subdivide, combine or
            reclassify its outstanding shares of common stock. The exercise
            price of the warrants will also be adjusted if the Company
            consolidates or merges.

            The Company has agreed to register the shares underlying the
            warrants for resale, which it intends to do so sometime after the
            filing of its Form 10-K.

      (d)   August 2003 Warrants

            As a result of the August 2003 refinancing, the Company raised
            $6.925 million and issued 2,008,250 five-year warrants to purchase
            the Company's common stock at $1.00 per share.


(8)   STOCK OPTIONS

      (a)   Employee Stock Options

            The Company has adopted two stock option plans (the "1996 Plan" and
            the "2000 Plan") under which options to purchase shares of the
            Company's common stock may be granted to employees. The purpose of
            the 1996 Plan and the 2000 Plan is to provide an incentive to
            attract, motivate and retain qualified competent employees whose
            efforts and judgment are important to the Company's success through
            the encouragement of the ownership of stock by such persons.

            Under the 1996 Plan 500,000 shares of common stock are reserved for
            issuance upon exercise of options granted. Under the 2000 Plan,
            1,000,000 shares of common stock are reserved for issuance upon the
            exercise of options, with the amount reserved being increased each
            year by ten percent of the total shares subject to the 2000 Plan at
            the end of the previous calendar year. Options to purchase 311,048
            shares of stock are outstanding under the 1996 Plan and options to
            purchase 349,000 shares of stock are available to be granted under
            the 2000 Plan. The Board of

                                      F-19

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



            Directors has determined that no additional options will be granted
            under the 1996 Plan.

            Options granted under the 1996 Plan and the 2000 Plan expire no
            later than ten years from the date of grant. Options granted under
            the 1996 Plan and the 2000 Plan are not exercisable after the period
            or periods provided in the respective option agreements. The
            following table summarizes stock option activity for both plans for
            the periods indicated:

<TABLE>
<CAPTION>
                                                                                     Weighted
                                                                  1996 and 2000       Average
                                                                      Plans       Exercise Price
                                                                  -------------   --------------
<S>                                                               <C>                <C>
                  Options outstanding as of January 31, 1999         210,052         $   3.49
                                                                  ===========        ========
                    Granted .................................        159,000         $   5.49
                    Cancelled ...............................        (32,200)        $   4.60
                    Exercised ...............................        (60,300)        $   3.44
                                                                  -----------        --------
                  Options outstanding as of January 31, 2000         276,552         $   4.55
                                                                  ===========        ========
                    Granted .................................        738,000         $   1.50
                    Cancelled ...............................        (13,200)        $   5.16
                    Exercised ...............................         (2,200)        $   3.69
                                                                  -----------        --------
                  Options outstanding as of January 31, 2001         999,152         $   2.30
                                                                  ===========        ========
                    Granted .................................        240,000         $   1.50
                    Cancelled ...............................        (35,700)        $   2.68
                    Exercised ...............................             --         $  --
                                                                  -----------        --------
                  Options outstanding as of June 30, 2001 ...      1,203,452         $   2.13
                                                                  ===========        ========
                    Granted .................................        190,000         $   1.32
                    Cancelled ...............................       (379,000)        $   2.31
                    Exercised ...............................             --         $  --
                                                                  -----------        --------
                  Options outstanding as of June 30, 2002 ...      1,014,452         $   1.89
                                                                  ===========        ========
                    Granted .................................             --         $  --
                    Cancelled ...............................        (27,000)        $   2.08
                    Exercised ...............................             --         $  --
                                                                  -----------        --------
                  Options outstanding as of June 30, 2003 ...        987,452         $   1.88
                                                                  ===========        ========

                    Exercisable .............................        608,385         $   2.77

                  Available for future grant (2000 Plan only)        349,000
                                                                  ===========
</TABLE>

                                      F-20

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      The following table summarizes information about stock options outstanding
      under both plans as of June 30, 2003:

<TABLE>
<CAPTION>
                                            Weighted
                                             Average      Weighted                    Weighted
                                            Remaining      Average      Number         Average
            Exercise          Number       Contractual    Exercise     of Shares      Exercise
             Price         Outstanding    Life (Years)     Price      Exercisable       Price
         --------------    -----------    ------------   ---------   -----------     ----------
<S>      <C>                 <C>               <C>         <C>          <C>            <C>
         $1.07 to $1.50      861,000           7.58        $ 1.46       481,933        $ 1.49
         $3.37 to $4.13       90,952           4.29        $ 3.75        90,952        $ 3.75
         $6.00 to $7.63       35,500           6.08        $ 7.31        35,500        $ 7.31
                              ------                                   -------

               TOTALS        987,452                                   608,385
                             =======                                   =======
</TABLE>

      (b)   Director Stock Options

            The Company adopted effective as of May 2001 a separate stock option
            plan for non-employee members of the Company's Board of Directors
            (the "Directors Plan"). The purpose of the Directors Plan is to
            provide an additional incentive to attract and retain qualified
            competent directors upon whose efforts and judgment are important to
            the Company's success through the encouragement of the ownership of
            stock by such persons.

            Under the Directors Plan, 250,000 shares of common stock are
            reserved for issuance upon the exercise of options granted. Each
            non-employee who serves as a member of the Company's board of
            directors as of the effective date of the Directors Plan, and each
            non-employee who is elected or otherwise appointed as one of the
            Company's directors thereafter, will receive a fully vested option
            to purchase 20,000 shares of stock. On the last day of each fiscal
            quarter while the Directors Plan is in effect, each non-employee
            director will receive an additional grant of an option to purchase
            625 shares of stock. Further, in accordance with the Directors Plan,
            additional options may be granted to non-employee directors from
            time to time. Options to purchase 185,000 shares of common stock are
            currently outstanding under the Directors Plan and 65,000 shares of
            stock are available to be granted in the future.

            Options granted under the Directors Plan expire no later than ten
            years from the date of grant and are with limited exceptions
            exercisable as of the grant date.

      The following table summarizes the stock option activity under the
      Directors' Plan for the periods indicated:

                                      F-21

<PAGE>
                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                Weighted Average
                                                              Directors Plan     Exercise Price
                                                              --------------    ----------------
<S>                                                             <C>                 <C>
      Options outstanding as of January 31, 2001.......                --           $      --

        Granted........................................           100,000           $    1.60
        Cancelled......................................                --           $      --
        Exercised......................................                --           $      --
                                                                ---------           ---------

      Options outstanding as of June 30, 2001..........           100,000           $    1.60
                                                                =========           =========

        Granted........................................            52,500           $    1.52
        Cancelled......................................                --           $      --
        Exercised......................................                --           $      --
                                                                ---------           ---------

      Options outstanding as of June 30, 2002..........           152,500           $    1.57
                                                                =========           =========

        Granted........................................            53,125           $    1.21
        Cancelled......................................           (20,625)          $    1.25
        Exercised......................................                --           $      --
                                                                ---------           ---------

      Options outstanding as of June 30, 2003..........           185,000           $    1.51
                                                                =========           =========

          Exercisable                                             185,000           $    1.51
                                                                =========

      Available for future grant                                   65,000
                                                                =========
</TABLE>

      The following table summarizes information about the Directors stock
      options outstanding under the Plan as of June 30, 2003:

<TABLE>
<CAPTION>
                                          Weighted
                                           Average        Weighted                   Weighted
                                          Remaining        Average       Number      Average
        Exercise           Number        Contractual      Exercise      of Shares    Exercise
          Price         Outstanding      Life (Years)       Price      Exercisable    Price
      --------------    -----------      ------------     --------     -----------   --------
<S>   <C>                <C>                 <C>           <C>          <C>           <C>
      $.92 to $1.11       12,500             9.35          $ 1.02        12,500       $1.02
      $1.24 to $1.35      29,375             9.11          $ 1.27        29,375       $1.27
      $1.50 to $1.60     143,125             7.81          $ 1.60       143,125       $1.60
                         -------                                        -------

      TOTALS             185,000                                        185,000
                         =======                                        =======
</TABLE>

(9)   SIGNIFICANT CUSTOMERS

      Revenue (excluding fuel taxes) from one significant customer, the United
      States Postal Service, totaled $8.5 million or 16%, and $8.4 million or
      19% of total revenue in the fiscal years ended June 30, 2003 and 2002,
      respectively. However, revenue from this customer was generated from a
      total of 9 and 10 separate and independent written contracts of varying
      lengths of service and renewal options for the years ended June 30, 2003
      and 2002, respectively. Accounts receivable from this customer totaled
      $943,000 and $1.3 million at June 30, 2003 and 2002, respectively. Revenue
      from two significant customers, excluding fuel taxes, totaled
      approximately $5.8 million or 26% of total revenue, excluding fuel taxes,
      in the five-month period ended June 30, 2001. Revenue from three
      significant customers, excluding fuel taxes, totaled $12.1 million or 19%
      of the total revenue, excluding fuel taxes in the fiscal year ended
      January 31, 2001.

                                      F-22
<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(10)  RELATED PARTY TRANSACTIONS

      The note receivable from related party represents amounts owed by
      Streicher Enterprises, Inc. ("Enterprises"), an entity wholly owned by the
      Company's former Chairman, Stanley H. Streicher. This note receivable
      amounted to approximately $52,000, $204,000, and $583,000 at June 30,
      2003, 2002 and 2001, respectively, and $540,000 at January 31, 2001
      bearing interest at 8.25 percent per annum. Two promissory notes to the
      Company, one dated January 31, 1997, in the amount of $319,043 due January
      31, 2007, and the second in the amount of $94,850 dated January 31, 1998
      due January 31, 2007 (the "Notes"), represented most of the above amount.
      Mr. Streicher personally guaranteed the principal of, and interest on, the
      Notes. Interest income on the notes included approximately $25,000,
      $41,000 and $18,000 for the years ended June 30, 2003 and 2002 and the
      transition period ended June 30, 2001 respectively, and approximately
      $42,000 for the fiscal year ended 2001. Enterprises was required to make
      annual payments of interest only with a final payment of all accrued
      interest and unpaid principal due on January 31, 2007. The note receivable
      is secured by a pledge of 360,213 shares of the Company's common stock
      owned by Supreme Oil Company, another entity wholly owned by
      Mr. Streicher.

      On April 1, 2002, Mr. Streicher and Supreme Oil Company Inc. and the
      Company entered into an agreement with respect to the repayment by
      Mr. Streicher and Supreme of the Notes and certain other debt
      (collectively, the "Debt"). In connection therewith, Supreme delivered to
      the Company additional shares of the Company's stock owned by Supreme, so
      that an aggregate of 533,088 shares of the Company's common stock owned by
      Supreme (the " Certificates") were pledged as security for the Debt.

      On June 12, 2002, Supreme sold 613,000 shares of the Company's common
      stock for aggregate gross proceeds of $711,080 and net proceeds of at
      least $680,000. On June 29, 2002, Mr. Streicher tendered $480,000 to
      the Company as partial repayment of the Debt. The Company informed
      Mr. Streicher and Supreme that it considered the failure to pay the
      remaining $200,000 to be a breach of the April 1, 2002 agreement and
      demanded immediate payment.

      On July 19, 2002, after Mr. Streicher and Supreme refused the Company's
      demand, the Company suspended further payments of salary to Mr. Streicher
      under his November 1, 2000 employment agreement. As of September 29, 2003,
      $214,803 in net after-tax salary due to Mr. Streicher under that
      employment agreement, as well as interest of $25,119, has been withheld by
      the Company.

      The Company was also a party to certain lease agreements with
      Mr. Streicher as more fully described in Note 12.

      In the years ended June 30, 2003, 2002 and 2001, respectfully, the Company
      paid $60,000, $38,000 and $101,000 for certain financial consulting and
      investor relation services to a third party entity whose Chairman and
      Chief Executive Officer is a director of the Company.

      The convertible subordinated promissory notes converted in January
      2002, the December 2002 short-term promissory note, the January 2003
      subordinated promissory notes and the May 12, 2003 promissory notes,
      were issued to a director and other affiliates of the Company. In
      addition, a portion of the May 20, 2003 subordinated promissory notes
      and related warrants were issued to officers, directors and other
      affiliates of the Company. These notes are more fully described in Note
      6.


                                      F-23

<PAGE>
                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(11)  INCOME TAXES

      The actual tax benefit (provision) of the Company for the years ended June
      30, 2003 and 2002, the five-month transition period ended June 30, 2001
      and year ended January 31, 2001 differs from the statutory Federal tax
      rate of 34% due to the following:

<TABLE>
<CAPTION>
                                                                                          Transition
                                                          Fiscal Year     Fiscal Year        Period       Fiscal Year
                                                            June 30,        June 30,        June 30,      January 31,
                                                              2003            2002            2001            2001
                                                         ------------------------------------------------------------
<S>                                                        <C>             <C>             <C>             <C>
      Expected benefit (provision) for income taxes
        at the statutory Federal income tax rate of 34%    $ 538,000       $ 395,000       $ 663,000       $ 454,000
      State income taxes, net of federal benefit              37,000          42,000          70,000          50,000
      Other                                                   13,000         (59,000)          2,000         (89,000)
      Nondeductible expenses                                  (9,000)       (102,000)         (5,000)        (22,000)
      Deferred tax valuation allowance                      (579,000)       (276,000)       (730,000)       (393,000)
                                                           ----------      ----------      ----------      ----------
      Benefit (provision) for income taxes                 $      --       $      --       $      --       $      --
                                                           ==========      ==========      ==========      ==========
</TABLE>

      Deferred income taxes reflect the net effects of temporary differences
      between the carrying amounts of assets and liabilities for financial
      reporting purposes and their income tax bases, and operating loss
      carryforwards.

      The tax effects of temporary differences and operating loss carryforwards
      that give rise the significant portions of the deferred tax assets and
      liabilities at June 30, 2003 and 2002 are presented below:

<TABLE>
<CAPTION>
                                                                         June 30,
                                                           ------------------------------------
                                                                 2003                 2002
                                                           ------------------------------------
<S>                                                         <C>                   <C>
           Deferred tax assets:
           Net operating loss carryforwards                 $  4,880,000          $  4,620,000
           Asset basis adjustment for Reorganization             275,000               307,000
           Allowance for doubtful accounts                       200,000               118,000
           Accrued expenses                                       32,000                    --
           Contributions carryover                                 3,000                 3,000
                                                            -------------         -------------

           Total gross deferred tax assets                     5,390,000             5,048,000

           Less:  valuation allowance                         (2,863,000)           (2,284,000)
                                                            -------------         -------------

           Total deferred tax assets                           2,527,000             2,764,000
                                                            =============         =============

           Deferred tax liabilities:
           Property and equipment                             (2,438,000)           (2,698,000)
           Software development costs                            (89,000)                   --
           Accrued expenses                                           --               (37,000)
           Other                                                      --               (29,000)
                                                            -------------         -------------

           Total deferred tax liabilities                     (2,527,000)           (2,764,000)
                                                            =============         =============

           Net deferred tax assets                          $         --          $         --
                                                            =============         =============
</TABLE>

      Realization of deferred tax assets is dependent upon generating sufficient
      taxable income in future periods. Management believes that these net
      operating loss and credit carryforwards may expire unused and will not
      meet the "more likely than not" criteria of SFAS No. 109, and, accordingly
      has established a valuation allowance for the excess of deferred tax
      assets over deferred tax liabilities.

      The net change in the valuation allowance for the years ended June 30,
      2003 and 2002, the five-month transition period ended June 30, 2001 and
      year ended January 31, 2001 was an increase of $579,000, an

                                      F-24
<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      increase of $276,000, an increase of $730,000 and an increase of $393,000,
      respectively. All increases to the valuation allowance during these
      periods were recorded through the provision for taxes. As of June 30,
      2003, the Company has net operating loss carryforwards of approximately
      $13.0 million which will begin to expire in the year 2011.


(12)  COMMITMENTS AND CONTINGENCIES

      (a)   Operating Leases

            The Company leases real property and equipment under operating
            leases that expire at various times through the year 2015. Future
            minimum lease payments under non-cancelable operating leases as of
            June 30, 2003:

                              Year Ended        Operating Lease
                               June 30,            Payments
                            --------------     -----------------

                                 2004               337,000
                                 2005               100,000
                                 2006                49,000
                                 2007                20,000
                                 2008                15,000
                              Thereafter            105,000
                                                 ----------
                                                 $  626,000
                                                 ==========

            In April 2001, the Company relocated its corporate offices and
            entered into a lease agreement for its new corporate offices. At
            that time, the Company was obligated under a July 31, 1993 lease
            agreement covering the former corporate offices with the Company's
            Chairman, Stanley H. Streicher, the expiration of which lease was
            July 31, 2013. In May 2001, the Company entered into a sub-lease
            agreement with an unrelated third party for the lease of the
            Company's former corporate offices. In January 2002, Mr. Streicher
            canceled the lease covering the Company's former corporate offices
            and the Company assigned the sublease to Mr. Streicher, effective
            February 1, 2002. Under the terms of the lease cancellation and
            assignment of sublease, it was provided that Mr. Streicher would
            reimburse the Company on or before March 31, 2002 for the net book
            value of all leasehold improvements to its former corporate offices
            paid for by and carried on the books of the Company, as of April 30,
            2001, which amount was $59,600 (see Note 8, Related Party
            Transactions).

            The Company has also been obligated to Mr. Streicher under two
            operating leases covering property utilized for division truck yards
            and offices, one of which expired in April 2002. While the second
            lease does not expire until August of 2015, Mr. Streicher sold the
            property covered by it to an unrelated third party in April 2003. In
            conjunction with the sale, Mr. Streicher assigned the lease to the
            purchaser of the property extinguishing any further obligation of
            the Company to Mr. Streicher under it. Rent expense paid to Mr.
            Streicher by the Company for the lease of its former corporate
            offices and the two division facilities was $12,000, $30,000,
            $23,000 and $88,000, for the fiscal years ended June 30, 2003 and
            2002, the transition period ended June 30, 2001, and the fiscal year
            ended January 31, 2001.

                                      F-25

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



      (b)   Governmental Regulation

            Numerous federal, state and local laws, regulations and ordinances,
            including those relating to protection of the environment and worker
            safety, affect the Company's operations. Various federal, state and
            local agencies have broad powers under these laws, regulations and
            ordinances. In particular, the operation of the Company's mobile
            fueling fleet and its transportation of diesel fuel and gasoline are
            subject to extensive regulation by the U.S. Department of
            Transportation ("DOT") under the Federal Motor Carrier Safety Act
            ("FMCSA") and the Hazardous Materials Transportation Act ("HMTA").
            The Company is subject to regulatory and legislative changes that
            can affect the economics of the industry by requiring changes in
            operating practices or influencing the demand for, and the cost of
            providing, its services. In addition, the Company depends on the
            supply of diesel fuel and gasoline from the oil and gas industry
            and, therefore, is affected by changing taxes, price controls and
            other laws and regulations generally relating to the oil and gas
            industry. The Company cannot determine the extent to which its
            future operations and earnings may be affected by new legislation,
            new regulations or changes in existing regulations.

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

            In the opinion of management, the Company is in substantial
            compliance with existing laws and regulations, although there can be
            no assurance that substantial costs for compliance will not be
            incurred in the future. Moreover, it is possible that other
            developments, such as stricter environmental laws, regulations and
            enforcement policies thereunder, could result in additional,
            presently unquantifiable, costs or liabilities to the Company.

      (c)   Employment Agreements

            The Company entered into a three-year employment agreement with
            Stanley H. Streicher on November 1, 2000, pursuant to which
            Mr. Streicher serves as Chairman of the Board of Directors and
            performs other functions requested by the Company. The agreement
            provides for an annual salary of $300,000, bonuses, if any, as
            determined by the Board and that 980,000 stock options held by
            Mr. Streicher will be forfeited to the Company, without
            additional consideration, upon the request of the Board. On
            December 21, 2000, Mr. Streicher forfeited these stock options in
            response to such a request. The agreement further provides that
            it may be terminated by the Company at any time and for any
            reason. If the agreement is terminated without cause,
            Mr. Streicher is entitled to receive his base salary until the
            later of eighteen months following the actual date of termination
            or October 31, 2002. If the agreement is terminated for cause,
            Mr. Streicher is not entitled to any further salary or other
            compensation.

            By agreement dated April 1, 2002, the Company, Mr. Streicher and a
            company wholly owned by Mr. Streicher, Supreme Oil Company, agreed
            that Mr. Streicher would undertake an orderly liquidation of his and
            Supreme's shares of the Company's common stock, directly or
            indirectly, and use the net proceeds of any sales of such stock to
            repay approximately $680,000 which he and

                                      F-26

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



            Supreme owed to the Company. On or about June 13, 2002, Supreme sold
            613,000 shares of the stock for net proceeds of approximately
            $680,000. Mr. Streicher has paid $480,000 of the proceeds of that
            sale to the Company but has challenged the validity of portions
            of the underlying debt and has therefore declined to pay the
            balance of approximately $200,000 to the Company. As a result of
            Mr. Streicher's actions, effective July 19, 2002, the Company
            suspended further payments of salary to Mr. Streicher under his
            November 1, 2000 employment agreement. The Company believes that
            Mr. Streicher's retention of the $200,000 was a breach of the
            April 1, 2002 debt repayment agreement between him and the
            Company and constitutes grounds for termination of Mr. Streicher's
            employment agreement for cause. As of September 30, 2003, the
            Company has not terminated Mr. Streicher for cause under his
            employment agreement. If the Company does so, it will no longer
            be obligated to pay any salary or other compensation to him under
            that agreement. Any such termination would not affect the
            obligation of Mr. Streicher and Supreme to repay the $200,000
            (see Note 10, Related Party Transactions).

            The Company entered into an employment agreement with Richard E.
            Gathright on October 26, 2000 pursuant to which Mr. Gathright serves
            as President and Chief Executive Officer of the Company. The
            agreement has a term of three years, commencing on October 26, 2000,
            provides for an annual base salary of $300,000, participation, with
            other members of management, in a bonus program, whereby up to 10%
            of the Company's pretax profits will be set aside for bonus
            payments, and the grant of 500,000 options to purchase shares of the
            Company's common stock at a price of $1.50 per share. The agreement
            further provides that it may be terminated by the Company at any
            time and for any reason. If the agreement is terminated by the
            Company without cause, Mr. Gathright shall be due the greater of all
            base salary payable through the term of the agreement or eighteen
            months base salary. If the agreement is terminated for cause, as
            defined, Mr. Gathright will not be entitled to the severance
            payments specified. On September 25, 2003, the Company and
            Mr. Gathright amended the term of the agreement extending it from
            three to four years.

            The Company has also entered into written employment agreements with
            certain other company officers. The agreements vary in terms up to
            one year and automatically renew for successive periods unless
            notice of termination is given by the Company prior to a renewal
            period.

      (d)   Absence of Written Agreements

            Most of the Company's customers do not have written agreements with
            the Company and can terminate the Company's mobile fueling services
            at any time and for any reason. If the Company were to experience a
            high rate of terminations, the Company's business and financial
            performance could be adversely affected.

      (e)   Litigation

            The Company may be subject to legal proceedings and claims which
            arise in the ordinary course of its business. In the opinion of
            management no litigation or claims exist that would have a material
            effect on the consolidated financial position or results of
            operations of the Company.

      (f)   Other Commitments

            At June 30, 2003, the Company had no purchase commitments.

                                      F-27

<PAGE>

                 STREICHER MOBILE FUELING, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



(13)  EMPLOYEE BENEFIT PLAN

      In May 1998, the Company adopted a 401(k) plan for all employees over the
      age of 21 with 1,000 hours of service in the previous six months of
      employment. The Company terminated its 401(k) plan as of December 31, 2001
      and final liquidation of Plan assets was made in April 2002. The Plan
      provided for a discretionary match of employee contributions as determined
      by the Board of Directors. No Company contributions were made for the
      years ended June 30, 2002, the five-month transition period ended June 30,
      2001 or the year ended January 31, 2001.

                                      F-28