| Delaware |   | 62-1581902 |
|----------|--------|------------|

| (State or Other Jurisdiction      ofIncorporation or      Organization) |   | (IRS Employer Identification      Number) |
|-------------------------------------------------------------------------|--------|-------------------------------------------|

| Large accelerated filer [ ] |   | Accelerated filer [ ] |
|-----------------------------|--------|-----------------------|

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

|   | Period |   | High* |   | Low* |   |
|--------|--------|--------|-------|--------|------|--------|

|   | 2007 | First Quarter |   | $.53 |   | $.11 |   |
|--------|------|---------------|--------|------|--------|------|--------|

|   |   | Second Quarter |   | $1.60 |   | $.43 |   |
|--------|--------|----------------|--------|-------|--------|------|--------|

|   |   | Third Quarter |   | $1.25 |   | $.90 |   |
|--------|--------|---------------|--------|-------|--------|------|--------|

|   |   | Fourth Quarter |   | $.85 |   | $.59 |   |
|--------|--------|----------------|--------|------|--------|------|--------|

|   | 2008 | First Quarter |   | $.71 |   | $.45 |   |
|--------|------|---------------|--------|------|--------|------|--------|

|   |   | Second Quarter |   | $.74 |   | $.17 |   |
|--------|--------|----------------|--------|------|--------|------|--------|

|   |   | Third Quarter |   | $.22 |   | $.03 |   |
|--------|--------|---------------|--------|------|--------|------|--------|

|   |   | Fourth Quarter |   | $.03 |   | $.01 |   |
|--------|--------|----------------|--------|------|--------|------|--------|

|   | 2009 | First Quarter |   | $.03 |   | $.02 |   |
|--------|------|---------------|--------|------|--------|------|--------|

|   |  * | The foregoing prices have been adjusted to reflect a (a)      one-for-seventeen reverse split of our common stock occurring in September      2004 and (b) a one-share-for-every-two-shares forward split of our common      stock occurring in May 2007. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Plan      Category |   | Number of      securities to be issued upon exercise of outstanding options, warrants and      rights |   | Weighted      averageexercise      price of outstanding options, warrants and rights |   | Number of      securities remaining available for future  issuance |
|--------------------|--------|-------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|

| Equity compensation plans approved by security holders |   | -0- |   | -0- |   | -0- |
|--------------------------------------------------------|--------|-----|--------|-----|--------|-----|

| Equity compensation plans not approved by security holders |   | -0- |   | -0- |   | 1,600,000(1) |
|------------------------------------------------------------|--------|-----|--------|-----|--------|--------------|

| Individual Compensation Arrangements |   | 11,040,732(2) |   | $.55 |   | 11,040,732 shares |
|--------------------------------------|--------|---------------|--------|------|--------|-------------------|

|   | Name |   | Age |   | Position(s) |   |
|--------|------|--------|-----|--------|-------------|--------|

|   | Dean E. SukowateyJames R. BroghammerScott D. Zabler |   | 564651 |   | President, Acting Chief Financial Officer,    Secretary and DirectorDirectorDirector |   |
|--------|-----------------------------------------------------|--------|--------|--------|----------------------------------------------------------------------------------------------------------|--------|

| Name and Principal Position | Year | Salary($) | Bonus($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan      Compensation($) | Nonqualified Deferred Compensation      Earnings($) | All Other Compensation ($) | Total($) |
|-----------------------------|------|-----------|----------|------------------|-------------------|------------------------------------------------|-----------------------------------------------------|----------------------------|----------|

| Dean E. Sukowatey | 2008 | 240,000 | --- | --- | --- | --- | --- | --- | 240,000 |
|-------------------|------|---------|-----|-----|-----|-----|-----|-----|---------|

| President and Acting Chief Financial Officer | 2007 | 240,000 | --- | --- | --- | --- | --- | --- | 240,000 |
|----------------------------------------------|------|---------|-----|-----|-----|-----|-----|-----|---------|

|   | 2006 | --- | --- | --- | --- | --- | --- | --- | --- |
|--------|------|-----|-----|-----|-----|-----|-----|-----|-----|

| Brian K. Gibson | 2008 | --- | --- | --- | --- | --- | --- | --- | --- |
|-----------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

| Former Treasurer | 2007 | --- | --- | --- | --- | --- | --- | --- | --- |
|------------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

|   | 2006 | --- | --- | --- | --- | --- | --- | --- | --- |
|--------|------|-----|-----|-----|-----|-----|-----|-----|-----|

| David Loflin | 2008 | --- | --- | --- | --- | --- | --- | --- | --- |
|--------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

| Former President and Acting CFO | 2007 | --- | --- | 80,000 | --- | --- | --- | --- | 80,000 |
|---------------------------------|------|-----|-----|--------|-----|-----|-----|-----|--------|

|   | 2006 | --- | --- | 76,500 | --- | --- | --- | --- | 76,500 |
|--------|------|-----|-----|--------|-----|-----|-----|-----|--------|

| Waddell D. Loflin | 2008 | --- | --- | --- | --- | --- | --- | --- | --- |
|-------------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

| Former Executive V.P. and Secretary | 2007 | --- | --- | --- | --- | --- | --- | --- | --- |
|-------------------------------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

|   | 2006 | --- | --- | 4,000 | --- | --- | --- | --- | 4,000 |
|--------|------|-----|-----|-------|-----|-----|-----|-----|-------|

| James Kaufman | 2008 | --- | --- | --- | --- | --- | --- | --- | --- |
|---------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

| Former President | 2007 | --- | --- | --- | --- | --- | --- | --- | --- |
|------------------|------|-----|-----|-----|-----|-----|-----|-----|-----|

|   | 2006 | --- | --- | --- | --- | --- | --- | --- | --- |
|--------|------|-----|-----|-----|-----|-----|-----|-----|-----|

|   | Option      Awards | Stock      Awards |
|--------|--------------------|-------------------|

| Name | Number of Securities Underlying      Unexercised Options (#) Exercisable | Number of Securities Underlying      Unexercised Options (#) Unex-ercisable | Equity IncentivePlan Awards: Number of Securities      Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That      Have Not Vested (#) | Market Value of Shares or Units of Stock      That Have Not Vested ($) | Equity Incentive Plan Awards: Number of      Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or      Payout Value of Unearned Shares, Units or Other Rights That Have Not      Vested ($) |
|------|--------------------------------------------------------------------------|-----------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|---------------------------|------------------------|------------------------------------------------------------------|------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| Dean E. Sukowatey | --- | --- | --- | --- | n/a | --- | n/a | --- | --- |
|-------------------|-----|-----|-----|-----|-----|-----|-----|-----|-----|

| James R. Broghammer | 5,520,366 | --- | --- | .55 | 12/2017 | --- | n/a | --- | --- |
|---------------------|-----------|-----|-----|-----|---------|-----|-----|-----|-----|

| Scott D. Zabler | 5,520,366 | --- | --- | .55 | 12/2017 | --- | n/a | --- | --- |
|-----------------|-----------|-----|-----|-----|---------|-----|-----|-----|-----|

| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation      ($) | Nonqualified Deferred Compensation      Earnings ($) | All Other Compensation ($) | Total ($) |
|------|---------------------------------|------------------|-------------------|-------------------------------------------------|------------------------------------------------------|----------------------------|-----------|

| CURRENT DIRECTORS |   |   |   |   |   |   |   |
|-------------------|--------|--------|--------|--------|--------|--------|--------|

| Dean E. Sukowatey | --- | --- | --- | --- | --- | (1) | --- |
|-------------------|-----|-----|-----|-----|-----|-----|-----|

| James R. Broghammer | --- | --- | --- | --- | --- | (1) | --- |
|---------------------|-----|-----|-----|-----|-----|-----|-----|

| Scott D. Zabler | --- | --- | --- | --- | --- | --- | --- |
|-----------------|-----|-----|-----|-----|-----|-----|-----|

| FORMER DIRECTORS |   |   |   |   |   |   |   |
|------------------|--------|--------|--------|--------|--------|--------|--------|

| Steven J. Leavitt | --- | 19,350(2) | --- | --- | --- | --- | --- |
|-------------------|-----|-----------|-----|-----|-----|-----|-----|

| Brian K. Gibson | --- | 19,350(2) | --- | --- | --- | --- | --- |
|-----------------|-----|-----------|-----|-----|-----|-----|-----|

| Mark W. Leonard | --- | 32,550(3) | --- | --- | --- | --- | --- |
|-----------------|-----|-----------|-----|-----|-----|-----|-----|

| David Loflin | --- | --- | --- | --- | --- | --- | --- |
|--------------|-----|-----|-----|-----|-----|-----|-----|

| Waddell D. Loflin | --- | --- | --- | --- | --- | --- | --- |
|-------------------|-----|-----|-----|-----|-----|-----|-----|

| James Kaufman | --- | --- | --- | --- | --- | --- | --- |
|---------------|-----|-----|-----|-----|-----|-----|-----|

|   | BeneficiallyOwned |
|--------|-------------------|

| Name and      Address of Beneficial Owner |   | Shares |   | Percent(1) |
|-------------------------------------------|--------|--------|--------|------------|

| Dean E. Sukowatey |   | 8,715,534 |   | 13.86% |
|-------------------|--------|-----------|--------|--------|

| James R. Broghammer |   | 8,219,808(2) |   | 13.07% |
|---------------------|--------|--------------|--------|--------|

| Scott D. Zabler |   | 8,219,808(2) |   | 13.07% |
|-----------------|--------|--------------|--------|--------|

| ALL Energy Company |   | 7,050,000 |   | 11.20% |
|--------------------|--------|-----------|--------|--------|

| Sun Bear, LLC (3) |   | 8,219,808 |   | 13.07% |
|-------------------|--------|-----------|--------|--------|

| All directors, executive officers and founders, including ALL Energy      Company, as a group (5 persons) |   | 40,424,958 |   | 64.27% |
|-----------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|

|   |   |   | Year Ended      December 31, 2008 |   | Year Ended      December 31, 2007 |   |
|--------|--------|--------|-----------------------------------|--------|-----------------------------------|--------|

|   | Audit Fees |   | $25,000 |   | $31,500 |   |
|--------|------------|--------|---------|--------|---------|--------|

|   | Audit related fees |   | $0 |   | $0 |   |
|--------|--------------------|--------|----|--------|----|--------|

|   | Tax |   | $0 |   | $0 |   |
|--------|-----|--------|----|--------|----|--------|

|   | All other fees |   | $0 |   | $0 |   |
|--------|----------------|--------|----|--------|----|--------|

|   | Exhibit No. |   | Description |
|--------|-------------|--------|-------------|

|   | 22.1 * |   | Subsidiaries of Registrant. |
|--------|--------|--------|-----------------------------|

|   | 31.1 * |   | Certification as Adopted Pursuant to Section 302 (a) of the      Sarbanes-Oxley Act of 2002. |
|--------|--------|--------|----------------------------------------------------------------------------------------------|

|   | 32.1 * |   | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant      to Section 906 of the Sarbanes-Oxley Act of2002. |
|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | * filed herewith. |
|--------|-------------------|

|   | /s/ DEAN E. SUKOWATEY |   |   |
|--------|-----------------------|--------|--------|

|   | Dean E. SukowateyPresident      (principal executive officer), Secretary, Acting Chief Financial Officer      (principal financial officer) and Director |   |   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|

|   |
|--------|

|   |   |   |   |
|--------|--------|--------|--------|

|   | James R. BroghammerDirector |   |   |
|--------|-----------------------------|--------|--------|

|   |
|--------|

|   | /s/ SCOTT D. ZABLER |   |   |
|--------|---------------------|--------|--------|

|   | Scott D. ZablerDirector |   |   |
|--------|-------------------------|--------|--------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | CONSOLIDATED BALANCE SHEETS |   |
|--------|-----------------------------|--------|

|   | December      31, 2008 and 2007 |   |
|--------|---------------------------------|--------|

|   | 2008 |   | 2007 |
|--------|------|--------|------|

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

| Current assets |
|----------------|

|   | Cash and cash equivalents | $314,224 |   | $612,888 |
|--------|---------------------------|----------|--------|----------|

|   | Prepaid expenses | 7,439 |   | 52,637 |
|--------|------------------|-------|--------|--------|

|   | Total current assets | 321,663 |   | 665,525 |
|--------|----------------------|---------|--------|---------|

| Property and equipment - at cost |
|----------------------------------|

|   | Land | --- |   | 951,238 |
|--------|------|-----|--------|---------|

|   | Equipment | 1,729 |   | 1,093 |
|--------|-----------|-------|--------|-------|

|   | Construction in progress | --- |   | 187,024 |
|--------|--------------------------|-----|--------|---------|

|   |   | 1,729 |   | 1,139,355 |
|--------|--------|-------|--------|-----------|

|   | Less accumulated depreciation | (815) |   | (275) |
|--------|-------------------------------|-------|--------|-------|

|   | Total property and equipment - net | 914 |   | 1,139,080 |
|--------|------------------------------------|-----|--------|-----------|

| Other assets |
|--------------|

|   | Deferred borrowing costs | --- |   | 3,672 |
|--------|--------------------------|-----|--------|-------|

|   | Total other assets | --- |   | 3,672 |
|--------|--------------------|-----|--------|-------|

|   | Total assets | $322,577 |   | $1,808,277 |
|--------|--------------|----------|--------|------------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | 2008 |   | 2007 |
|--------|------|--------|------|

| LIABILITIES AND STOCKHOLDERS’ EQUITY      (DEFICIT) |
|-----------------------------------------------------------|

| Current liabilities |
|---------------------|

|   | Accounts payable and accrued expenses | $140,458 |   | $83,992 |
|--------|---------------------------------------|----------|--------|---------|

|   | Total current liabilities | 140,458 |   | 83,992 |
|--------|---------------------------|---------|--------|--------|

| Long term debt | --- |   | 488,000 |
|----------------|-----|--------|---------|

|   | Total liabilities | 140,458 |   | 571,992 |
|--------|-------------------|---------|--------|---------|

| Stockholders’ equity (deficit) |
|--------------------------------------|

|   | Common stock, $.01 par value; 80,000,000 shares authorized,      51,624,386 and 51,365,719 shares issued and outstanding | 516,245 |   | 513,658 |
|--------|--------------------------------------------------------------------------------------------------------------------------|---------|--------|---------|

|   | Additional paid-in capital | 16,053,072 |   | 14,981,840 |
|--------|----------------------------|------------|--------|------------|

|   | Treasury stock, at cost | (150,000) |   | (150,000) |
|--------|-------------------------|-----------|--------|-----------|

|   | Receivable from shareholder | (50,000) |   | (50,000) |
|--------|-----------------------------|----------|--------|----------|

|   | Accumulated deficit | (6,423,944) |   | (6,423,944) |
|--------|---------------------|-------------|--------|-------------|

|   | Deficit accumulated during the development stage | (9,763,254) |   | (7,635,269) |
|--------|--------------------------------------------------|-------------|--------|-------------|

|   | Total stockholders’ equity (deficit) | 182,119 |   | 1,236,285 |
|--------|--------------------------------------------|---------|--------|-----------|

|   | Total liabilities and stockholders’ equity (deficit) | $322,577 |   | $1,808,277 |
|--------|------------------------------------------------------------|----------|--------|------------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | CONSOLIDATED STATEMENTS OF      OPERATIONS |   |
|--------|--------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008 |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   |   |   | 2008 |   | 2007 |   |   |   | Period      fromCommence-ment of DevelopmentStage      (June 7,2004) to      12/31/08(unaudited) |
|--------|--------|--------|------|--------|------|--------|--------|--------|--------------------------------------------------------------------------------------------------|

| Revenues |   |   | $--- |   | $--- |   |   |   | $--- |
|----------|--------|--------|------|--------|------|--------|--------|--------|------|

| Operating Costs and Expenses |   |   |   |   |   |   |   |   |   |
|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Consulting |   |   | 913,987 |   | 6,529,913 |   |   |   | 7,623,900 |
|--------|------------|--------|--------|---------|--------|-----------|--------|--------|--------|-----------|

|   | Legal and professional |   |   | 309,072 |   | 617,201 |   |   |   | 1,118,566 |
|--------|------------------------|--------|--------|---------|--------|---------|--------|--------|--------|-----------|

|   | Impairment charge |   |   | 193,720 |   | 87,820 |   |   |   | 333,540 |
|--------|-------------------|--------|--------|---------|--------|--------|--------|--------|--------|---------|

|   | General and administrative |   |   | 514,553 |   | 497,920 |   |   |   | 1,240,513 |
|--------|----------------------------|--------|--------|---------|--------|---------|--------|--------|--------|-----------|

|   | Total operating expenses |   |   | 1,931,332 |   | 7,732,854 |   |   |   | 10,316,519 |
|--------|--------------------------|--------|--------|-----------|--------|-----------|--------|--------|--------|------------|

| Other income (expense) |   |   |   |   |   |   |   |   |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Interest expense |   |   | (23,543) |   | (33,272) |   |   |   | (56,815) |
|--------|------------------|--------|--------|----------|--------|----------|--------|--------|--------|----------|

|   | Interest income |   |   | 7,023 |   | 24,910 |   |   |   | 51,194 |
|--------|-----------------|--------|--------|-------|--------|--------|--------|--------|--------|--------|

|   | Rental income |   |   | 40,000 |   | 26,250 |   |   |   | 66,250 |
|--------|---------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Equity loss in subsidiary |   |   | (218,855) |   | --- |   |   |   | (218,855) |
|--------|---------------------------|--------|--------|-----------|--------|-----|--------|--------|--------|-----------|

|   | Loss on sale of land |   |   | (1,278) |   | --- |   |   |   | (1,278) |
|--------|----------------------|--------|--------|---------|--------|-----|--------|--------|--------|---------|

|   | Total other income (expense) |   |   | (196,653) |   | 17,888 |   |   |   | (159,504) |
|--------|------------------------------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|

| Net loss |   |   | $(2,127,985) |   | $(7,714,966) |   |   |   | $(10,476,023) |
|----------|--------|--------|--------------|--------|--------------|--------|--------|--------|---------------|

| Income (loss) per share |   |   | $(0.04) |   | $(0.10) |   |   |   |   |
|-------------------------|--------|--------|---------|--------|---------|--------|--------|--------|--------|

| Weighted average number of shares outstanding (basic and      diluted) |   |   | 51,399,797 |   | 40,037,702 |   |   |   |   |
|------------------------------------------------------------------------|--------|--------|------------|--------|------------|--------|--------|--------|--------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | STATEMENT      OF STOCKHOLDERS’ (DEFICIT) EQUITY |   |
|--------|--------------------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008 |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Shares | Amount | Additional Paid-in Capital | Stockholder Receivable | Treasury Stock | Accumulated Deficit | Deficit Accumulated during Development      Stage | Stockholder’s (Deficit) Equity |   |
|--------|--------|--------|----------------------------|------------------------|----------------|---------------------|---------------------------------------------------|--------------------------------------|--------|

| Balance, June 7, 2004 | 1,758,981 | $17,590 | $6,385,950 | $--- | $--- | $(6,423,944) | $--- | $(20,404) |   |
|-----------------------|-----------|---------|------------|------|------|--------------|------|-----------|--------|

| Stock issued for services at $.34 per share | 750,000 | 7,500 | 247,500 | --- | --- | --- | --- | 255,000 |   |
|---------------------------------------------|---------|-------|---------|-----|-----|-----|-----|---------|--------|

| Stock issued for services at $.167 per share | 150,000 | 1,500 | 23,500 | --- | --- | --- | --- | 25,000 |   |
|----------------------------------------------|---------|-------|--------|-----|-----|-----|-----|--------|--------|

| Stock issued at $.14 per share | 357,150 | 3,571 | 46,429 | (50,000) | --- | --- | --- | --- |   |
|--------------------------------|---------|-------|--------|----------|-----|-----|-----|-----|--------|

| Contributions from stockholders | --- | --- | 20,754 | --- | --- | --- | --- | 20,754 |   |
|---------------------------------|-----|-----|--------|-----|-----|-----|-----|--------|--------|

| Net loss | --- | --- | --- | --- | --- | --- | (284,350) | (284,350) |   |
|----------|-----|-----|-----|-----|-----|-----|-----------|-----------|--------|

| Balance, December 31, 2004 | 3,016,131 | 30,161 | 6,724,133 | (50,000) | --- | (6,423,944) | (284,350) | (4,000) |   |
|----------------------------|-----------|--------|-----------|----------|-----|-------------|-----------|---------|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | STATEMENT      OF STOCKHOLDERS’ (DEFICIT) EQUITY |   |
|--------|--------------------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008      (cont.) |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Shares | Amount | Additional Paid-in Capital | Stockholder Receivable | Treasury Stock | Accumulated Deficit | Deficit Accumulated during Development      Stage | Stockholder’s (Deficit) Equity |   |
|--------|--------|--------|----------------------------|------------------------|----------------|---------------------|---------------------------------------------------|--------------------------------------|--------|

| Net loss | --- | --- | --- | --- | --- | --- | (100) | (100) |   |
|----------|-----|-----|-----|-----|-----|-----|-------|-------|--------|

| Balance, December 31, 2005 | 3,016,131 | 30,161 | 6,724,133 | (50,000) | --- | (6,423,944) | (284,450) | (4,100) |   |
|----------------------------|-----------|--------|-----------|----------|-----|-------------|-----------|---------|--------|

| Stock issued for bonus at $.023 per share | 3,375,000 | 33,750 | 42,750 | --- | --- | --- | --- | 76,500 |   |
|-------------------------------------------|-----------|--------|--------|-----|-----|-----|-----|--------|--------|

| Stock issued for bonus at $.027 per share | 150,000 | 1,500 | 2,500 | --- | --- | --- | --- | 4,000 |   |
|-------------------------------------------|---------|-------|-------|-----|-----|-----|-----|-------|--------|

| Stock issued for legal services at $.027 per share | 750,000 | 7,500 | 12,500 | --- | --- | --- | --- | 20,000 |   |
|----------------------------------------------------|---------|-------|--------|-----|-----|-----|-----|--------|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | STATEMENT      OF STOCKHOLDERS’ (DEFICIT) EQUITY |   |
|--------|--------------------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008      (cont.) |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Shares | Amount | Additional Paid-in Capital | Stockholder Receivable | Treasury Stock | Accumulated Deficit | Deficit Accumulated during Development      Stage | Stockholder’s (Deficit) Equity |   |
|--------|--------|--------|----------------------------|------------------------|----------------|---------------------|---------------------------------------------------|--------------------------------------|--------|

| Stock issued for services at $.027 per share | 75,000 | 750 | 1,250 | --- | --- | --- | --- | 2,000 |   |
|----------------------------------------------|--------|-----|-------|-----|-----|-----|-----|-------|--------|

| Stock issued for web page assets at $.027 per share | 1,950,000 | 19,500 | 32,500 | --- | --- | --- | --- | 52,000 |   |
|-----------------------------------------------------|-----------|--------|--------|-----|-----|-----|-----|--------|--------|

| Contributions from stockholder | --- | --- | 600 | --- | --- | --- | --- | 600 |   |
|--------------------------------|-----|-----|-----|-----|-----|-----|-----|-----|--------|

| Net loss | --- | --- | --- | --- | --- | --- | (155,000) | (155,000) |   |
|----------|-----|-----|-----|-----|-----|-----|-----------|-----------|--------|

| Balance, December 31, 2006 | 9,316,131 | 93,161 | 6,816,233 | (50,000) | --- | (6,423,944) | (439,450) | (4,000) |   |
|----------------------------|-----------|--------|-----------|----------|-----|-------------|-----------|---------|--------|

| Stock issued for bonus at $.026 per share | 3,000,000 | 30,000 | 50,000 | --- | --- | --- | --- | 80,000 |   |
|-------------------------------------------|-----------|--------|--------|-----|-----|-----|-----|--------|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | STATEMENT      OF STOCKHOLDERS’ (DEFICIT) EQUITY |   |
|--------|--------------------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008      (cont.) |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Shares | Amount | Additional Paid-in Capital | Stockholder Receivable | Treasury Stock | Accumulated Deficit | Deficit Accumulated during Development      Stage | Stockholder’s (Deficit) Equity |   |
|--------|--------|--------|----------------------------|------------------------|----------------|---------------------|---------------------------------------------------|--------------------------------------|--------|

| Stock issued in acquisition | 37,995,000 | 379,950 | 1,253,805 | --- | --- | --- | --- | 1,633,755 |   |
|-----------------------------|------------|---------|-----------|-----|-----|-----|-----|-----------|--------|

| Stock issued for services at $.67 per share | 390,000 | 3,900 | 258,300 | --- | --- | --- | --- | 262,200 |   |
|---------------------------------------------|---------|-------|---------|-----|-----|-----|-----|---------|--------|

| Stock issued for services at $.75 per share | 150,000 | 1,500 | 111,000 | --- | --- | --- | --- | 112,500 |   |
|---------------------------------------------|---------|-------|---------|-----|-----|-----|-----|---------|--------|

| Stock issued for cash | 75,000 | 750 | 74,250 | --- | --- | --- | --- | 75,000 |   |
|-----------------------|--------|-----|--------|-----|-----|-----|-----|--------|--------|

| Stock issued as bonus at $1.00 per share | 30,000 | 300 | 29,700 | --- | --- | --- | --- | 30,000 |   |
|------------------------------------------|--------|-----|--------|-----|-----|-----|-----|--------|--------|

| Stock issued for cash on option exercise | 50,000 | 500 | 31,286 | --- | --- | --- | --- | 31,786 |   |
|------------------------------------------|--------|-----|--------|-----|-----|-----|-----|--------|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | STATEMENT      OF STOCKHOLDERS’ (DEFICIT) EQUITY |   |
|--------|--------------------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008      (cont.) |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Shares | Amount | Additional Paid-in Capital | Stockholder Receivable | Treasury Stock | Accumulated Deficit | Deficit Accumulated during Development      Stage | Stockholder’s (Deficit) Equity |   |
|--------|--------|--------|----------------------------|------------------------|----------------|---------------------|---------------------------------------------------|--------------------------------------|--------|

| Stock issued in private offering for cash | 359,588 | 3,597 | 282,053 | --- | --- | --- | --- | 285,650 |   |
|-------------------------------------------|---------|-------|---------|-----|-----|-----|-----|---------|--------|

| Treasury stock | --- | --- | --- | --- | (150,000) | --- | --- | (150,000) |   |
|----------------|-----|-----|-----|-----|-----------|-----|-----|-----------|--------|

| Warrants | --- | --- | 6,075,213 | --- | --- | --- | --- | 6,075,213 |   |
|----------|-----|-----|-----------|-----|-----|-----|-----|-----------|--------|

| Net loss | --- | --- | --- | --- | --- | --- | (7,195,819) | (7,195,819) |   |
|----------|-----|-----|-----|-----|-----|-----|-------------|-------------|--------|

| Balance, December 31, 2007 | 51,365,719 | 513,658 | 14,981,840 | (50,000) | (150,000) | (6,423,944) | (7,635,269) | 1,236,285 |   |
|----------------------------|------------|---------|------------|----------|-----------|-------------|-------------|-----------|--------|

| Stock issued for services | 1,000,000 | 10,000 | 530,000 | --- | --- | --- | --- | 540,000 |   |
|---------------------------|-----------|--------|---------|-----|-----|-----|-----|---------|--------|

| Shares cancelled | (1,238,000) | (12,380) | 12,380 | --- | --- | --- | --- | --- |   |
|------------------|-------------|----------|--------|-----|-----|-----|-----|-----|--------|

| Stock bonus | 75,000 | 750 | 40,650 | --- | --- | --- | --- | 41,400 |   |
|-------------|--------|-----|--------|-----|-----|-----|-----|--------|--------|

| Stock issued for cash | 405,000 | 4,050 | 192,589 | --- | --- | --- | --- | 196,639 |   |
|-----------------------|---------|-------|---------|-----|-----|-----|-----|---------|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | STATEMENT      OF STOCKHOLDERS’ (DEFICIT) EQUITY |   |
|--------|--------------------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008      (cont.) |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Shares | Amount | Additional Paid-in Capital | Stockholder Receivable | Treasury Stock | Accumulated Deficit | Deficit Accumulated during Development      Stage | Stockholder’s (Deficit) Equity |   |
|--------|--------|--------|----------------------------|------------------------|----------------|---------------------|---------------------------------------------------|--------------------------------------|--------|

| Options | --- | --- | 285,780 | --- | --- | --- | --- | 285,780 |   |
|---------|-----|-----|---------|-----|-----|-----|-----|---------|--------|

| Stock issued for services | 16,667 | 167 | 9,833 | --- | --- | --- | --- | 10,000 |   |
|---------------------------|--------|-----|-------|-----|-----|-----|-----|--------|--------|

| Net loss | --- | --- | --- | --- | --- | --- | (2,127,985) | (2,127,985) |   |
|----------|-----|-----|-----|-----|-----|-----|-------------|-------------|--------|

| Balance, December 31, 2008 | 51,624,386 | $516,245 | $16,053,072 | $(50,000) | $(150,000) | $(6,423,944) | $(9,763,254) | $182,119 |   |
|----------------------------|------------|----------|-------------|-----------|------------|--------------|--------------|----------|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | CONSOLIDATED STATEMENTS OF CASH      FLOWS |   |
|--------|--------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008 |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   |   |   | 2008 |   | 2007 |   |   |   | Period fromCommence-ment of DevelopmentStage (June 7,2004) to 12/31/08(unaudited) |
|--------|--------|--------|------|--------|------|--------|--------|--------|-----------------------------------------------------------------------------------|

| CASH FLOWS FROM OPERATING ACTIVITIES |   |   |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

| Net loss |   | $(2,127,985) |   | $(7,714,966) |   |   |   | $(10,476,023) |
|----------|--------|--------------|--------|--------------|--------|--------|--------|---------------|

|   | Adjustments to reconcile net loss to cash used for operating      activities: |   |   |   |   |   |   |   |   |
|--------|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Loss on sale of land |   | 1,278 |   | --- |   |   |   | 1,278 |
|--------|----------------------|--------|-------|--------|-----|--------|--------|--------|-------|

|   | Depreciation and amortization |   | 4,212 |   | 2,000 |   |   |   | 6,338 |
|--------|-------------------------------|--------|-------|--------|-------|--------|--------|--------|-------|

|   | Options issued for compensation |   | 867,180 |   | 6,075,213 |   |   |   | 6,942,393 |
|--------|---------------------------------|--------|---------|--------|-----------|--------|--------|--------|-----------|

|   | Stock issued for services and compensation |   | 10,000 |   | 780,515 |   |   |   | 1,176,345 |
|--------|--------------------------------------------|--------|--------|--------|---------|--------|--------|--------|-----------|

|   | Impairment charge |   | 193,720 |   | 87,820 |   |   |   | 333,540 |
|--------|-------------------|--------|---------|--------|--------|--------|--------|--------|---------|

|   | Decrease in deposits |   | --- |   | 10,000 |   |   |   | --- |
|--------|----------------------|--------|-----|--------|--------|--------|--------|--------|-----|

|   | (Increase) decrease in prepaids |   | 45,198 |   | (125,327) |   |   |   | (95,259) |
|--------|---------------------------------|--------|--------|--------|-----------|--------|--------|--------|----------|

|   | Increase (decrease) in accounts payable |   | 56,466 |   | (2,122) |   |   |   | 82,827 |
|--------|-----------------------------------------|--------|--------|--------|---------|--------|--------|--------|--------|

| Net cash used for operating activities |   | (949,931) |   | (886,867) |   |   |   | (2,028,561) |
|----------------------------------------|--------|-----------|--------|-----------|--------|--------|--------|-------------|

| CASH FLOWS FROM INVESTING ACTIVITIES |   |   |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Purchase of land |   | --- |   | (951,238) |   |   |   | (951,238) |
|--------|------------------|--------|-----|--------|-----------|--------|--------|--------|-----------|

|   | Increase in accrued liabilities - related party |   | --- |   | --- |   |   |   | 40,056 |
|--------|-------------------------------------------------|--------|-----|--------|-----|--------|--------|--------|--------|

|   | Decrease in receivable - related party |   | --- |   | 22,500 |   |   |   | --- |
|--------|----------------------------------------|--------|-----|--------|--------|--------|--------|--------|-----|

|   | Proceeds from sale of land |   | 461,960 |   | --- |   |   |   | 461,960 |
|--------|----------------------------|--------|---------|--------|-----|--------|--------|--------|---------|

|   | Purchase of office equipment |   | (636) |   | --- |   |   |   | (1,966) |
|--------|------------------------------|--------|-------|--------|-----|--------|--------|--------|---------|

|   | Payments on construction in progress |   | (6,696) |   | (69,557) |   |   |   | (193,720) |
|--------|--------------------------------------|--------|---------|--------|----------|--------|--------|--------|-----------|

| Net cash used for investing activities |   | 454,628 |   | (998,295) |   |   |   | (644,908) |
|----------------------------------------|--------|---------|--------|-----------|--------|--------|--------|-----------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

|   | CONSOLIDATED STATEMENTS OF CASH      FLOWS |   |
|--------|--------------------------------------------|--------|

|   | For the      Years Ended December 31, 2008 and 2007, and the Period from Commencement      of Development Stage (June 7, 2004) to December 31, 2008      (cont.) |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   |   |   | 2008 |   | 2007 |   |   |   | Period fromCommence-ment of DevelopmentStage (June 7,2004) to 12/31/08(unaudited) |
|--------|--------|--------|------|--------|------|--------|--------|--------|-----------------------------------------------------------------------------------|

| CASH FLOWS FROM FINANCING ACTIVITIES |   |   |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Proceeds from sale of common stock for cash |   | 196,639 |   | 392,435 |   |   |   | 2,653,623 |
|--------|---------------------------------------------|--------|---------|--------|---------|--------|--------|--------|-----------|

|   | Principal payments on related party advances |   | --- |   | --- |   |   |   | (3,988) |
|--------|----------------------------------------------|--------|-----|--------|-----|--------|--------|--------|---------|

|   | Proceeds from long-term debt, net of deferred borrowingcosts |   | --- |   | 483,120 |   |   |   | 483,120 |
|--------|--------------------------------------------------------------|--------|-----|--------|---------|--------|--------|--------|---------|

|   | Purchase of treasury stock |   | --- |   | (150,000) |   |   |   | (150,000) |
|--------|----------------------------|--------|-----|--------|-----------|--------|--------|--------|-----------|

|   | Contributions from shareholders |   | --- |   | --- |   |   |   | 950 |
|--------|---------------------------------|--------|-----|--------|-----|--------|--------|--------|-----|

| Net cash used for financing activities |   | 196,639 |   | 725,555 |   |   |   | 2,983,705 |
|----------------------------------------|--------|---------|--------|---------|--------|--------|--------|-----------|

|   |
|--------|

| NET CHANGE IN CASH |   | (298,664) |   | (1,159,607) |   |   |   | 310,236 |
|--------------------|--------|-----------|--------|-------------|--------|--------|--------|---------|

| Cash, beginning of period |   | 612,888 |   | 1,772,495 |   |   |   | 3,988 |
|---------------------------|--------|---------|--------|-----------|--------|--------|--------|-------|

| Cash, end of period |   | $314,224 |   | $612,888 |   |   |   | $314,224 |
|---------------------|--------|----------|--------|----------|--------|--------|--------|----------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|   | ALL FUELS      & ENERGY COMPANY |   |
|--------|-------------------------------------|--------|

|   | (a      development stage company) |   |
|--------|------------------------------------|--------|

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

|   | December      31, 2008 |   |
|--------|------------------------|--------|

|   |
|--------|

| Note 1 | Summary of Significant AccountingPolicies |
|--------|-------------------------------------------|

| Note 2 | Management’s Plans for      Liquidity |
|--------|---------------------------------------------|

| Note 3 | Provision for Income      Taxes |
|--------|---------------------------------|

|   |   | 2008 |   | 2007 |   | 2006 |
|--------|--------|------|--------|------|--------|------|

| Net operating loss carryforward |   | $3,517,420 |   | $2,891,070 |   | $2,333,554 |
|---------------------------------|--------|------------|--------|------------|--------|------------|

| Timing difference related to options |   | 2,162,737 |   | 2,065,572 |   | --- |
|--------------------------------------|--------|-----------|--------|-----------|--------|-----|

| Valuation |   | (5,680,157) |   | (4,956,642) |   | (2,333,554) |
|-----------|--------|-------------|--------|-------------|--------|-------------|

| Total income tax benefit (liability) |   | $ 0 |   | $ 0 |   | $ 0 |
|--------------------------------------|--------|-----|--------|-----|--------|-----|

|   | December31, |
|--------|-------------|

|   |   | 2008 |   | 2007 |   | 2006 |
|--------|--------|------|--------|------|--------|------|

| Net loss before taxes |   | $2,127,985 |   | $7,714,966 |   | $(155,000) |
|-----------------------|--------|------------|--------|------------|--------|------------|

| U.S. statutory rate |   | 34% |   | 34% |   | 34% |
|---------------------|--------|-----|--------|-----|--------|-----|

| Change in deferred tax |   | (723,515) |   | (2,623,088) |   | (52,700) |
|------------------------|--------|-----------|--------|-------------|--------|----------|

| Change in deferred tax asset valuation account |   | 723,515 |   | 2,623,088 |   | 52,700 |
|------------------------------------------------|--------|---------|--------|-----------|--------|--------|

| Total tax expense |   | $ 0 |   | $ 0 |   | $ 0 |
|-------------------|--------|-----|--------|-----|--------|-----|

| Effective tax rate |   | 0.0% |   | 0.0% |   | 0.0% |
|--------------------|--------|------|--------|------|--------|------|

| Note 4 | 2007 Stock Ownership    Plan |
|--------|------------------------------|

| Note 5 | Impairment  Charge |
|--------|--------------------|

| Note 6 | Related Party      Transactions |
|--------|---------------------------------|

| Note 7 | Fair Value of Financial      Instruments |
|--------|------------------------------------------|

| Note 8 | Acquisition of ALL Energy      Company |
|--------|----------------------------------------|

| Note 9 | Forward Split of Common      Stock |
|--------|------------------------------------|

| Note 10 | Prepaid  Expenses |
|---------|-------------------|

| Note 11 | Land, Equipment and Construction in      Progress |
|---------|---------------------------------------------------|

| Note 12 | Long-term  Debt |
|---------|-----------------|

| Note 13 | Non-cash Investing and      Financing |
|---------|---------------------------------------|

| Note 14 | Capital  Stock |
|---------|----------------|

| Note 15 | Warrants |
|---------|----------|