----

----

|   |  Nevada                                                         |   |  33-0880427                        |   |
|--------|----------------------------------------------------------------------|--------|-----------------------------------------|--------|
|   |  (State or other jurisdiction of incorporation or organization) |   |  (IRS Employer Identification No.) |   |

| Large Accredited Filer [  ]      |  Accelerated Filer [  ]        |   |
|--------------------------------------------|------------------------------------------|--------|
| Non-Accredited Filer   [  ] |  Smaller Reporting Company [X] |   |

----

|  Freestone Resources, Inc.                  |
|--------------------------------------------------|
|  Consolidated Balance Sheets                |
|  As of September 30, 2009 and June 30, 2009 |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------------|---------|---------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | (Unaudited)        |            |    | (Audited)     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | September 30, 2009 |            |    | June 30, 2009 |   |
|                                                                                              Assets                                                           |   |               |            |    |          |   |
| Current Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |            |    |          |   |
|   Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $                  | 2,112           |    |          | $      | 4,815 |   |
|   Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               | 4,266           |    |          |   | 4,559 |   |
|   Note receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |               | -               |    |          |   | - |   |
|   Deposits and other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |               | -               |    |          |   | 5,068 |   |
|     Total Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |               | 6,378           |    |          |   | 14,442 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
| Fixed assets, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               | 32,932          |    |          |   | 33,052 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
| Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |               | 11,068          |    |          |   | 1,000 |   |
| Investment in Common Stock of Bleeding Rock (Note 6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               | 1,514,149       |    |          |   | - |   |
| Licenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |               | 150,000    |    |          |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                  | 1,675,217       |    |          | $      | 1,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
|  Total Assents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |               | 1,714,527  |    |          |   | 48,494  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
|                                                                                                  Liabilitiesand Stockholders' Equity (Deficit) |   |               |            |    |          |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
| Current Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
|   Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                  | 442,484         |    |          | $      | 24,431 |   |
|   Accounts payable – related party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               | 25,000          |    |          |   | 25,000 |   |
|   Note payable to bank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               | 25,000          |    |          |   | 25,997 |   |
|     Total Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               | 492,484         |    |          |   | 75,428 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
| Long-term Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |               |            |    |          |   |   |   |
| Long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               | -               |    |          |   | - |   |
| Asset  retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |               | 41,123          |    |          |   | 41,123 |   |
|   Total Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |               | 533,607         |    |          |   | 116,551 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |               |            |    |          |   |   |   |
| Stockholders’ Equity (Deficit):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |               |            |    |          |   |   |   |
| Common stock, $.001 par value, 100,000,000 shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               |            |    |          |   |   |   |
|   authorized, 66,718,994 and 35,115,260 shares issued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |            |    |          |   |   |   |
|   and outstanding, respectively                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |               | 66,719          |    |          |   | 35,115 |   |
| Additional paid in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |               | 15,804,789      |    |          |   | 14,572,244 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |               | (14,690,588     | )  |          |   | (14,675,416 | ) |
|   Total stockholders’ equity (deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |               | 1,180,920       |    |          |   | (68,057 | ) |
| Total Liabilities and Stockholders’ Equity (Deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $                  | 1,714,527       |    |          | $      | 48,494 |   |

----

|  Freestone Resources, Inc.                              |
|--------------------------------------------------------------|
|  Consolidated Statements of Operations                  |
|  For the Three Months Ended September 30, 2009 and 2008 |
|  (Unaudited)                                            |

|                                                                |   | Three Months Ended Sept 30, 2009 |       |   | Three Months Ended Sept 30, 2008 |   |
|---------------------------------------------------------------------|--------|----------------------------------|------------|--------|----------------------------------|--------|
|                                                                |   |                             |       |   |                             |   |
| Revenue:                                                            |   |                             |       |   |                             |   |
|   Oil and gas revenues resulting from research activities |   | $                                | 21,492     |   |                             | $      | 36,232 |   |
|     Total revenue                               |   |                             | 21,492     |   |                             |   | 36,232 |   |
|                                                                |   |                             |       |   |                             |   |   |   |
| Operating expenses:                                                 |   |                             |       |   |                             |   |   |   |
|   Cost of revenue                                         |   |                             | -          |   |                             |   | 4,558 |   |
|   Lease operating costs                                   |   |                             | 2,693      |   |                             |   | 42,091 |   |
|   Depreciation and depletion                              |   |                             | 619        |   |                             |   | 6,942 |   |
|   Impairment expense                                      |   |                             | 1,800      |   |                             |   | - |   |
|   General and administrative                              |   |                             | 26,308     |   |                             |   | 239,162 |   |
|     Total operating expenses                    |   |                             | 31,420     |   |                             |   | 292,753 |   |
|                                                                |   |                             |       |   |                             |   |   |   |
| Operating  income (loss)                                  |   |                             | (9,928     | )      |                             |   | (256,521 | ) |
|                                                                |   |                             |       |   |                             |   |   |   |
| Other income (expense):                                             |   |                             |       |   |                             |   |   |   |
|   Interest income (expense)                               |   |                             | (685       | )      |                             |   | (2,991 | ) |
|   Other income (expense)                                  |   |                             | (4,559     | )      |                             |   | - |   |
|   Negative Goodwill on purchase of Subsidiary             |   |                             | 180,201    |   |                             |   |   |   |
|    Total other income (expense)                      |   |                             | (5,244)    |   |                             |   | (2,991 | ) |
|                                                                |   |                             |       |   |                             |   |   |   |
| Net income (loss)                                                   |   | $                                | (15,172    | )      |                             | $      | (259,512 | ) |
|                                                                |   |                             |       |   |                             |   |   |   |
|                                                                |   |                             |       |   |                             |   |   |   |
| Basic and diluted income (loss) per share                           |   | $                                | 0.00       |   |                             | $      | 0.00 |   |
|                                                                |   |                             |       |   |                             |   |   |   |
| Weighted average shares outstanding:                                |   |                             |       |   |                             |   |   |   |
| Basic and diluted                                                   |   |                             | 37,519,892 |   |                             |   | 52,156,836 |   |

----

|  Freestone Resources, Inc.                                |
|----------------------------------------------------------------|
|  Consolidated Statement of Stockholders' Equity/(Deficit) |
|  September 30, 2009                                       |
|  (Unaudited)                                              |

|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |
|--------------------------------------------|--------|--------------|-------------|--------|------------|--------|---------|-----------------|--------|--------|------------|--------|--------|--------|-------------|
|                                       |   | Common Stock |        |   | Additional |   |    | Accumulated     |   |   |       |   |
|                                       |   | Shares       |        |   | Amount     |   |    | paid in capital |   |   | Deficit    |   |   | Total  |        |
|  Balance , June 30, 2008              |   |         | 50,025,260  |   |       | $      | 50,025  |            |   | $      | 13,964,084 |   |   | $      | (13,734,880 | ) |   | $ | 295,854 |   |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |
| Common stock issued for services           |   |         | 10,955,000  |   |       |   | 10,955  |            |   |   | 512,295    |   |   |   | -           |   |   |   | 523,250 |   |
| Common stock issued for note payable       |   |         | 2,000,000   |   |       |   | 2,000   |            |   |   | 68,000     |   |   |   | -           |   |   |   | 70,000 |   |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |
| Common Stock – cancelled             |   |         | (27,865,000 | )      |       |   | (27,865 | )               |   |   | 27,865     |   |   |   | -           |   |   |   | - |   |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |
| Net loss                                   |   |         |        |   |       |   |    |            |   |   |       |   |   |   | (957,161    | ) |   |   | (957,161 | ) |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |
| Balance, June 30, 2009                     |   |         | 35,115,260  |   |       | $      | 35,115  |            |   | $      | 14,572,244 |   |   | $      | (14,675,416 | ) |   | $ | (68,057 | ) |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |
| Common stock issued for acquisition of EOS |   |         | 31,603,734  |   |       |   | 31,604  |            |   |   | 1,232,545  |   |   |   | -           |   |   |   | 1,264,149 |   |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |
| Net Loss                                   |   |         |        |   |       |   |    |            |   |   |       |   |   |   | (15,172     | )  |   |   | (15,172 | )  |
| Balance, September 30, 2009                |   |         | 66,718,994  |   |       |   | 66,719  |            |   | $      | 15,804,789 |   |   | $      | (14,690,588 | ) |   | $ | 1,180,920 |   |
|                                       |   |         |        |   |       |   |    |            |   |   |       |   |   |   |        |   |   |   |   |   |

----

| Freestone Resources, Inc.Consolidated Statements of Cash FlowsThree Months Ended September 30, 2009 and 2008(Unaudited) |
|-------------------------------------------------------------------------------------------------------------------------|

|                                                                                               |   | Three months ended September 30, |       |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                                               |   | 2009                             |       |   | 2008 |   |
|                                                                                               |   |                             |       |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                              |   |                             |       |   |   |   |
| Net income (loss)                                                                                  |   | $                                | (15,172    | )  |   | $ | (259,512 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |   |                             |       |   |   |   |   |   |
|     Depreciation and amortization                                              |   |                             | 619        |   |   |   | 6,942 |   |
|     Shares issued for services                                                 |   |                             | -          |   |   |   | 215,500 |   |
| Changes in operating assets and liabilities                                                   |   |                             |       |   |   |   |   |   |
|     Write-off in note receivable                                               |   |                             | -          |   |   |   | 16,468 |   |
|     Change in account receivable                                               |   |                             | 293        |   |   |   | 39,977 |   |
|     Change in inventory of Petrozene                                           |   |                             | -          |   |   |   | (90,771 | ) |
|     Change in other assets                                                     |   |                             | (5,000     | ) |   |   | (10,000 | ) |
|     Change in accounts payable and accrued expenses                            |   |                             | 18,053     |   |   |   | (23,530 | ) |
|     Change in accounts payable - related party                                 |   |                             | -          |   |   |   | 101,786 |   |
|   Net cash provided by (used in) operating activities                                    |   |                             | (1,207     | )  |   |   | (3,140 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                              |   |                             |       |   |   |   |   |   |
|     Acquisition of  Subsidiary with stock                            |   |                             | (1,694,350 | ) |   |   |   |   |
|     Licenses assumed in acquisition of subsidiary                              |   |                             | (150,000   | ) |   |   |   |   |
|     Purchases of fixed assets                                                  |   |                             | (499       | ) |   |   | - |   |
|   Net cash used in investing activities                                                  |   |                             | (499       | ) |   |   | - |   |
| CASH FLOWS FROM FINANCING ACTIVITES:                                                               |   |                             |       |   |   |   |   |   |
|     Payments of note payable                                              |   |                             | (997       | ) |   |   | - |   |
|  Net cash provided by (used in) financing activities                                          |   |                             | (997       | )  |   |   | (762 | ) |
| NET CHANGE IN CASH                                                                                 |   |                             | (2,703     | ) |   |   | (3,902 | ) |
| CASH AT BEGINNING OF PERIOD                                                                        |   |                             | 4,815      |   |   |   | 13,548 |   |
| CASH AT END OF PERIOD                                                                              |   | $                                | 2,112      |   |   | $ | 9,646 |   |
| Supplemental cash flow information:                                                                |   |                             |       |   |   |   |   |   |
|    Cash paid for interest                                                           |   | $                                | 685        |   |   | $ | 2,991 |   |
| Non-cash investing activities:                                                                     |   |                             |       |   |   |   |   |   |
|    Acquisition of oil and gas interests and fixed assets for stock                  |   | $                                | -          |   |   | $ | 330,989 |   |
|    Stock issued for purchase of subsidiary                                          |   |                             | 1,264,149  |   |   |   |   |   |
|    Licenses assumed in acquisition of subsidiary                                    |   |                             | 150,000    |   |   |   |   |   |
|    Assumption of accounts payable and note payable                                  |   | $                                | 400,000    |   |   | $ | 181,412 |   |

----

----

|   | · | The Company owns 100% of EOS and has applied ASC 810 in consolidating the subsidiary. |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | EOS owns 50% of BRC, as does an unrelated third party, Hidden Peak Group.  Although each party owns 50%, Hidden Peak Group maintains control of the three person management board with three representatives, and therefore, applying the requirements for consolidations under ASC 810, EOS has not consolidated BRC but shows its impact through the Minority Interest method. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                    |   | September 30, 2009 |    |   | June 30, 2009 |   |
|-------------------------------------------------------------------------|--------|--------------------|---------|--------|---------------|--------|
| Computers & office furniture - net of accumulated depreciation      |   | $                  | 6,932   |   |          | $      | 7,052 |   |
| Oil and gas research and development equipment                          |   |               | 26,000  |   |          |   | 26,000 |   |
| Licenses                                                                |   |               | 150,000 |   |          |   | 0 |   |
| Total equipment and other fixed assets, net of accumulated depreciation |   | $                  | 32,932  |   |          | $      | 33,052 |   |

----

|                                  |   | 2009   |     |   | 2008   |   |
|---------------------------------------|--------|--------|----------|--------|--------|--------|
|  Net Operating Loss Carryforward |   | $      | 330,005  |   |   | $      | 324,847 |   |
|  Less: Valuation Allowance       |   |   | (330,005 | )      |   |   | (324,847 | ) |
|  Net Deferred Tax Asset          |   | $      | 0        |   |   | $      | 0 |   |

|  EOS Summary of Net Assets as of September 24, 2009 |
|----------------------------------------------------------|

|  Assets                   |   |   |      |
|--------------------------------|--------|--------|-----------|
|  Investment in Subsidiary |   | $      | 1,694,350 |   |
|  Licenses                 |   |   | 150,000   |   |
|  Total Assets             |   |   | 1,844,350 |   |
|                           |   |   |      |   |
|  Liabilities              |   |   |      |   |
|  Accounts payable         |   |   | 400,000   |   |
|  Total Liabilities        |   |   | 400,000   |   |
|                           |   |   |      |   |
|  Net Assets               |   | $      | 1,444,350 |   |

----

----

|  Freestone Resources, Inc.Consolidated Statements of OperationsPROFORMA(Unaudited) |
|-----------------------------------------------------------------------------------------|

|                                                                     |   |  Three Months Ended |       |
|--------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                     |   | September                |       |
|                                                                     |   |                     | 30, 2009   |   |
|                                                                     |   |                     |       |   |
| Revenue:                                                                 |   |                     |       |   |
|   Oil and gas resulting from research activities               |   | $                        | 21,492     |   |
|     Total revenue resulting from research activities |   |                     | 21,492     |   |
|                                                                     |   |                     |       |   |
| Operating expenses:                                                      |   |                     |       |   |
|   Cost of revenue                                              |   |                     | -          |   |
|   Lease operating costs                                        |   |                     | 2,693      |   |
|   Depreciation and depletion                                   |   |                     | 619        |   |
|   Impairment expense                                           |   |                     | 1,800      |   |
|   Engineering expense                                          |   |                     | 250,000    |   |
|   General and administrative                                   |   |                     | 26,308     |   |
|     Total operating expenses                         |   |                     | 281,420    |   |
|                                                                     |   |                     |       |   |
| Operating  income (loss)                                       |   |                     | (259,928   | ) |
|                                                                     |   |                     |       |   |
| Other income (expense):                                                  |   |                     |       |   |
|   Interest (expense)                                           |   |                     | (685       | ) |
|   Other income (expense)                                       |   |                     | (4,559     | ) |
|    Total other income (expense)                           |   |                     | (5,255     | )  |
|                                                                     |   |                     |       |   |
| Net income (loss)                                                        |   | $                        | (265,172   | ) |
|                                                                     |   |                     |       |   |
|                                                                     |   |                     |       |   |
| Basic and diluted income (loss) per share                                |   | $                        | (0.00      | ) |
|                                                                     |   |                     |       |   |
| Weighted average shares outstanding:                                     |   |                     |       |   |
| Basic and diluted                                                        |   |                     | 66,718,994 |   |

----

|   | · | The Company owns 100% of EOS and has applied ASC 810 in consolidating the subsidiary. |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | EOS owns 50% of BRC, as does an unrelated third party, Hidden Peak Group.  Although each party owns 50%, Hidden Peak Group maintains control of the three person management board with three representatives, and therefore, applying the requirements for consolidations under ASC 810, EOS has not consolidated BRC but shows its impact through the Minority Interest method. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control and financial statement presentation. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Item 2   - Unregistered Sales of Equity Securities and use of Proceeds. |
|---------------------------------------------------------------------------------------------|

|  Michael Doran |  Chief Executive Officer and Director |   |
|---------------------|--------------------------------------------|--------|

|  Clayton Carter |  Chief Executive Officer |   |
|----------------------|-------------------------------|--------|
|  Don Edwards    |  Director                |   |

|   | · | August 13, 2009: The departure and election of Officers. |
|--------|--------|----------------------------------------------------------|

|   | · | September 28, 2009: Announcing the purchase of EOS. |
|--------|--------|-----------------------------------------------------|

| 31.1            | Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. |
|------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2           | Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. |
|------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1            | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. |
|------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----