U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q








(Mark
One)





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





For the
quarterly period ended September 30, 2007





OR





[    ]TRANSITION REPORT UNDER SECTION 13 OF
15(d) OF THE EXCHANGE ACT OF 1934





Commission
File Number 000-28753





FREESTONE RESOURCES,
INC.


(Exact
name of small business issuer as specified in its charter)





Delaware
33-0880427


(State or
other jurisdiction of incorporation or organization) (IRS Employer
Identification No.)





11 Washington Street
Hawthorne, NJ 07506


(Address
of principal executive offices)





(973)
949-3200


(Issuer's
telephone number)




N/A


(Former name, former address and former
fiscal year, if changed since last report)





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





Indicate
by check mark whether the Registrant is a large accredited filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accredited filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act:





Large Accredited
Filer                                           [   ]                                Accelerated
Filer                                                      [   ]


Non-Accredited
Filer                                            
[   ]                                Smaller
Reporting
Company                                   [X]





Indicate
by check mark whether the  registrant is a shell company (as defined
in


Rule
12b-2 of the Exchange Act). Yes |X| No |    |





As of
June 10, 2008 there were 50,025,260 shares of Common Stock of the issuer
outstanding.








TABLE OF
CONTENTS





PART
I FINANCIAL STATEMENTS







Item
    1
            
            Financial
      Statements
            
            2Item
    2
            
            Management's
      Discussion and Analysis or Plan of Operation
            
            6







PART
II OTHER INFORMATION








Item
    1
            
            Legal
      Proceedings
            
            8Item
    2
            
            Changes in
      Securities
            
            8Item
    3
            
            Default upon
      Senior Securities
            
            8Item
    4
            
            Submission of
      Matters to a Vote of Security Holders
            
            8Item
    5
            
            Other
      Information
            
            8Item
    6
            
            Exhibits and
      Reports on Form 8-K
            
            8















2


FREESTONE
RESOURCES, INC.


(AN
EXPLORATION STAGE COMPANY)


CONSOLIDATED
BALANCE SHEETS


(Unaudited)











September
      30, 2007
            
            
            June
      30, 2007ASSETSCurrent
      AssetsNote
      receivable
            
            $
            16,468
            
            
            $
            16,468TOTAL
      ASSETS
            
            $
            16,468
            
            
            $
            16,468LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      liabilitiesAccounts
      payable
            
            $
            29,038
            
            
            $
            19,013Accounts
      payable – related party
            
            
            5,872
            
            
            
            5,872Total
      current liabilities
            
            
            34,910
            
            
            
            24,885STOCKHOLDERS’
      DEFICIT:Preferred
      stock, $.001 par value, 5,000,000 shares
              authorized,
      -0- shares issued and outstanding
            
            
            -
            
            
            
            -Common
      stock, $.001 par value, 50,000,000 shares
              authorized,
      19,800,260 and 19,260,260 shares issued
              and
      outstanding respectively
            
            
            19,800
            
            
            
            19,260Additional
      paid in capital
            
            
            13,814,663
            
            
            
            13,707,203Accumulated
      deficit
            
            
            (13,134,964
            )
            
            
            (13,134,964
            )Accumulated
      deficit during exploration stage
            
            
            (717,941
            )
            
            
            (599,916
            )Total
      stockholders’ deficit
            
            
            (18,442
            )
            
            
            (8,417
            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
            
            $
            16,468
            
            
            $
            16,468














See
accompanying notes to financial statements


3





FREESTONE
RESOURCES, INC.





(AN EXPLORATION STAGE
COMPANY)


CONSOLIDATED
STATEMENTS OF OPERATIONS


Three
Months Ended September 30, 2007 and 2006, and the


Period
from July 1, 2001 (Re-entering the Exploration Stage)


to
September 30, 2007


(Unaudited)














Three
      Months ended
              September
      30,
            
            
            Three
      Months ended
              September
      30,
            
            
            Re-entering
      the Exploration Stage to
              September
      30,2007
            
            
            2006
            
            
            2007General
      and administrative expenses
            
            $
            118,025
            
            
            $
            18,981
            
            
            $
            793,292Interest
      expense
            
            
            -
            
            
            
            -
            
            
            
            90,037Gain
      on debt forgiveness
            
            
            -
            
            
            
            -
            
            
            
            (165,388
            )Net
      loss
            
            $
            (118,025
            )
            
            $
            (18,981
            )
            
            $
            (717,941
            )Basic
      and diluted loss per share
            
            $
            (0.01
            )
            
            $
            (0.00
            )
            
            
            n/aWeighted average shares
      outstanding:Basic
      and diluted
            
            
            19,577,217
            
            
            
            15,400,390
            
            
            
            n/a








See
accompanying notes to financial statements


4


FREESTONE
RESOURCES, INC.





(AN EXPLORATION STAGE
COMPANY)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


Three
Months Ended September 30, 2007 and 2006, and for the


Period
from July 1, 2001 (Re-entering the Exploration Stage)


to
September 30, 2007


(Unaudited)

















September
      30,
            
            
            September
      30,
            
            
            Re-entering
      the Exploration Stage to September 30,2007
            
            
            2006
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (118,025
            )
            
            $
            (18,981
            )
            
            $
            (717,941
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Common
      stock issued for services
            
            
            108,000
            
            
            
            14,000
            
            
            
            754,850Gain
      on debt forgiveness
            
            
            -
            
            
            
            -
            
            
            
            (165,388
            )Change
      in note receivable
            
            
            -
            
            
            
            (5,747
            )
            
            
            3,532Change
      in accounts payable and accrued expenses
            
            
            10,025
            
            
            
            10,428
            
            
            
            119,075Change
      in accounts payable – related party
            
            
            -
            
            
            
            -
            
            
            
            5,872Net
      cash used in operating activities
            
            
            -
            
            
            
            -
            
            
            
            -NET
      CHANGE IN CASH
            
            
            -
            
            
            
            -
            
            
            
            -CASH
      AT BEGINNING OF PERIOD
            
            
            -
            
            
            
            -
            
            
            
            -CASH
      AT END OF PERIOD
            
            $
            -
            
            
            $
            -
            
            
            $
            -Supplemental
      cash flow information:Cash
      paid for interest
            
            $
            -
            
            
            $
            -
            
            
            $
            -Cash
      paid for income taxes
            
            
            -
            
            
            
            -
            
            
            
            -





See
accompanying notes to financial statements


5





FREESTONE
RESOURCES, INC.





(AN
EXPLORATION STAGE COMPANY)


NOTES TO
CONSOLIDATEDFINANCIAL
STATEMENTS


SEPTEMBER
30, 2007





NOTE 1 – BASIS OF
PRESENTATION





The
accompanying unaudited interim consolidated financial statements of Freestone
Resources, Inc. (“Freestone”) have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of
the Securities and Exchange Commission. The results of operations for the three
months ended September 30, 2007 are not necessarily indicative of the results of
operations for the full year or any other interim period.  The
information included in this Form 10-Q should be read in conjunction with
Management's Discussion and Analysis and Financial Statements and notes thereto
included in the Company’s June 30, 2007 Form 10-KSB.  Notes to the
consolidated financial statements which substantially duplicate the disclosure
contained in the audited financial statements for fiscal 2007 as reported in the
Form 10-KSB have been omitted.





NOTE 2 – GOING
CONCERN





As
reflected in the accompanying consolidated financial statements, Freestone
incurred operating losses, and has a negative working capital position as of
September 30, 2007.  The above factors raise substantial doubt about
Freestone's ability to continue as a going concern.  Freestone's
continued existence is dependent on its ability to obtain additional equity
and/or debt financing to fund its operations.  Freestone plans to
raise additional financing and to increase sales volume.  There is no
assurance that Freestone will obtain additional financing or achieve profitable
operations or cash inflows. The financial statements do not include any
adjustments relating to the recoverability or classification of recorded asset
amounts or the amount and classification of liabilities that might be necessary
as a result of this uncertainty.





NOTE 3 – COMMON
STOCK





During
the three months ended September 30, 2007 Freestone issued 540,000 shares of
common stock valued at $108,000 to consultants for services.





NOTE 4 – SUBSEQUENT
EVENTS





On
November 1, 2007, the Company agreed to issue 30,000,000 shares of common stock
in exchange for a building, certain oil and gas assets, assuming liabilities
related to those assets and receipt of a contract for
Petrozene.  Petrozene is a chemical which dissolves parafins and
asphaltines in oil wells, oil tanks, and other oil structures and therefore is
used as an aid to increase production of oil and gas properties..  The
transaction resulted in a change of control of the Company.





In
conjunction with the issuance of the 30,000,000 shares disclosed above, the
following persons became officers and directors of the Registrant. They are as
follows:





Lloyd
Lane                                           
President and Director


James
Carroll                                        
Vice President and Director


Tom
Bonner                                          
Secretary and Director


Mike
Doran                                           
Vice President and Director


Clayton
Carter                                       Vice
President and Director





On
December 12, 2007, the Company issued 200,000 shares of common stock for
services.On March 24, 2008, the Company issued 25,000 shares of common stock for
services.


On
March 31, 2008, James Carroll resigned as CEO of the Corporation and Lloyd Lane
was appointed CEO. Mr. Carroll remained as CFO.





























6


Item
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS





This
report contains forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company’s actual results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company’s filings with the Securities and Exchange
Commission, general economic conditions, and changes in the assumptions used in
making such forward looking statements.





General





Freestone
Resources, Inc. was involved in the operation of an internet computer supply
business until its operations were discontinued in 2001. It has had no business
since that time. The Company was incorporated as Para-Link, Inc. in the State of
Texas on January 22, 1997 and on March 10, 1999, Para-Link acquired 100% of the
outstanding capital stock of iChargeit Inc. ("iChargeit"). iChargeit was
incorporated on January 6, 1999 in the State of Nevada. On March 17, 1999, the
Company changed its name to iChargeit. On November 5, 1999 the Company was
reincorporated in Delaware. On August 22, 2007, the Company was reincorporated
in Nevada and changed its name to Freestone Resources, Inc. in anticipation of
going into the oil and gas business. The Company had been negotiating on certain
oil and gas properties and other assets which the Company purchased in November
2007.








RESULTS
FOR THE FISCAL QUARTER ENDED September 30, 2007





Our
fiscal quarter ended on September 30, 2007.  Any reference to the end
of the fiscal quarter refers to the end of the first fiscal quarter for the
periods discussed herein.





REVENUE.  We
had no revenue since we have no operations.





EXPENSES.
Total expenses for the three months ended September 30, 2007, were $118,025
compared with expenses for the three months ended September 30, 2006 of $18,981.
Of the $118,025, $108,000 relates to a non-cash item of common stock issued for
services.





NET LOSS.
Net loss for the three months ended September 30, 2007 was $(118,025) compared
to a net loss of $(18,981) for the three months ended September 30,
2006.





LIQUIDITY
AND CAPITAL RESOURCES. We have no cash reserves and no liquidity. We continue to
be in the process of seeking an acquisition candidate or assets to
purchase.





Employees





As of
September 30, 2007, our President was the Company’s only employee.








NEED FOR
ADDITIONAL FINANCING





The
Company is in the process of seeking an acquisition candidate or assets in order
to return value to its shareholders.





No
commitments to provide additional funds have been made by management or other
stockholders.  Our independent auditors included a going concern
qualification in their report included in our annual report on Form
10-KSB for the year ended June 30, 2007, which raises substantial doubt
about our ability to continue as a going concern.





Further,
there exist no agreements or understandings with regard to loan agreements by or
with the Officers, Directors, principals, affiliates or shareholders of the
Company.














ITEM
3.  CONTROLS AND PROCEDURES





Evaluation of Disclosure
Controls and Procedures


Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Securities Exchange Act of 1934, as
amended (the "Act") is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote.  As of the end of the period covered by this Annual Report, we
carried out an evaluation, under the supervision and with the participation of
our President, also serving as our Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures. 
Based on this evaluation, our President has concluded that the Company’s
disclosure controls and procedures are not effective because of the
identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.





The
material weakness relates to the lack of segregation of duties in financial
reporting, as our financial reporting and all accounting functions are performed
by an external consultant with no oversight by a professional with accounting
expertise.  Our President does not possess accounting expertise and our
company does not have an audit committee.  This weakness is due to the
company’s lack of working capital to hire additional staff.  To remedy this
material weakness, we intend to engage another accountant to assist with
financial reporting as soon as our finances will allow.







Changes in Internal Controls
over Financial Reporting


We have
not yet made any changes in our internal controls over financial reporting that
occurred during the period covered by this report on Form 10-Q that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.







PART
II





Items No.
1, 2, 3, 4, 5 - Not Applicable.








Item No.
6 - Exhibits and Reports on Form 8-K





(a) No
reports on Form 8-K were filed during the three months ended September 30,
2007.





(b)   Exhibits





Exhibit
Number                                                      Name
of Exhibit





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.











SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.





FREESTONE
RESOURCES, INC.





By /s/ Lloyd
Lane





Lloyd
Lane, President, CEO





Date: May
20, 2008





8